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A Living Wage 









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Copyright, 1906, 

Set up and electrotyped. Published April, 1906. Reprinted 
April, 1908 ; October, 1910 ; March, 1912. 




Through whose Writings the Author 

first became interested in the 

Study of Economic 


%\i\i 15oo& ti9 DeHicateD 


This work does not profess to present a complete 
theory of justice concerning wages. It lays down 
no minute rules to determine the full measure of 
compensation that any class of laborers ought to re- 
ceive. The principles of ethics have not yet been 
applied to the conditions of modern industry with 
sufficient intelligence, or confidence, or thoroughness, 
to provide a safe basis for such an undertaking. The 
conclusions to which it would lead would be either 
too general to be of any practical value, or too uncer- 
tain to yield more than a misleading approximation 
to ethical truth. At any rate, the doctrine advanced 
would probably fail to convince any considerable sec- 
tion of those to whom it was addressed. The great 
majority of fair-minded persons believe, indeed, that 
labor does not get its full share of the wealth that it 
helps to create, but they are not agreed as to the 
precise measure of that ideal share. 

Upon one principle of partial justice unprejudiced 
men are, however, in substantial agreement. They 
hold that wages should be sufficiently high to enable 
the laborer to live in a manner consistent with the 
dignity of a human being. To defend this general 
conviction by setting forth the basis of industrial, re- 
ligious and moral fact upon which it rests, is the aim 
of the present volume. Several considerations have 


led the author to think that this task is well worth 
while. In the first place, the Living Wage doctrine 
points the way to a very considerable amelioration of 
the condition of millions of American workingmen ; 
in the second place, a Living Wage would enable 
those raised to its level to improve their position 
still further; and, in the third place, this volume 
shows that religion, as represented by the oldest and 
largest of the Christian denominations, professes, 
nay, urges, a definite and considerable measure of 
industrial justice. 

While insisting that every laborer has a right to at 
least a Living Wage, the author does not commit 
himself to the view that this quantity of remuneration 
is full and adequate justice in the case of any class of 
laborers. His concern is solely with the ethical min- 

The permission of the Editors of the Catholic 
University Bulletin and the Catholic World to re- 
produce those portions of the work that have al- 
ready appeared in their publications, is gratefully 
acknowledged. In the same spirit the author wishes 
to record his indebtedness to the professors of the 
Catholic University of America under whose direc- 
tion the first draft of the work was written, namely, 
Dr. Bouquillon, who has since gone to his reward 
eternal, and Dr. Neill, who is at present the efficient 
Chief of the United States Bureau of Labor ; and to 
Dr. Ely of the University of Wisconsin, who read 
the work in manuscript and wrote the Introduction, 
and whose advice, assistance, and eftcouragement 
have been frequent and invaluable. If the author 


were to single out for especial acknowledgfment any 
of the writers whose works have aided him in the 
preparation of his own, he would mention the names 
of Sidney and Beatrice Webb and of John A. Hob- 
son; for these seem to him to have analysed and 
treated the principal industrial facts with which he 
has had to deal in a more adequate and vital way than 
any other writers with whom he is acquainted. 

John A. Ryan. 
St. Paul, Minn. 
March, ipo6 



I am glad to have an opportunity to point out 
briefly the significance of Professor Ryan's book, 
as it impresses itself on my mind. We have had 
repeated efforts to stimulate the conscience of the 
Christian world to a keener appreciation of its duties 
to the men, women and children who toil for wages. 
Christian socialism, so-called, has been presented 
frequently by men of various religious denomina- 
tions. A greater sensitiveness to right and wrong 
in economic affairs has undoubtedly been the result 
of this preaching of righteousness. Enlightenment 
has, however, not kept pace with good intention. On 
the contrary, nothing is more noticeable than the 
confusion of mind which very generally accompanies 
good intention. The "plain man" of whom we hear 
so much, has a feeling that our teachers and preach- 
ers are vague and indefinite. Is there after all such 
a thing as a Christian doctrine of wages ? The writer 
of this book, a priest in the Roman Catholic Church 
and a teacher in St. Paul Seminary, a theological 
school of that Church, presents to us in the following 
pages, a clear-cut, well-defined theory of wages, 
based upon his understanding of the approved doc- 
trines of his religious body. There have been at- 
tempts in other lands to deduce from the teachings of 
this Church, clear and precise directions for our in- 


dustrial life. We recall the works of Bishop von Ket- 
teler of Mainz and the more conservative writings of 
Professor Charles Perin of the University of Lou- 
vain in Belgium. While Cardinal Manning of Eng- 
land some years ago startled the English-speaking 
world by his enunciation of the right of man to a 
subsistence as prior to the rights of property as a 
doctrine of the Church, and while Cardinal Gibbons 
in the United States has on several occasions ex- 
pressed himself firmly and positively in regard to the 
rights of labor, the present work is, so far as I am 
aware, the first attempt in the English language to 
elaborate what may be called a Roman Catholic sys- 
tem of political economy. When I say, a Roman 
Catholic system of political economy, I mean an at- 
tempt to show exactly what the received doctrines of 
the Church signify in the mind of a representative 
Catholic when they are applied to the economic life. 
It strikes me as a meritorious performance at the 
present juncture to endeavor to express as precisely 
as may be what Christianity has to say about wages. 
While members of other religious bodies. Chris- 
tian and Jewish, cannot receive the doctrine of wages 
here set forth merely because it is assumed to rest 
on the approved teachings of the Roman Catholic 
Church, they are not precluded from an examination 
of this question: Does or does not this doctrine of 
wages rest upon broad Christian, religious and ethic- 
al foundations? It will be observed that Professor 
Ryan combines economic and ethical arguments with 
those derived from authority and that it is by no 
means impossible to receive arguments of the first 


class, while refusing adhesion to those of the second 
class. My own feeling then is that this book is to be 
welcomed as an attempt on the part of a religious 
teacher to get beyond vague and glittering general- 
ities to precise doctrine, and to pass from appeals to 
sentiment to reasoned arguments. 

While I have ventured in these few words to show 
what in my opinion is the significance of the present 
work, it is manifestly altogether beyond my province 
now and here to express any views of my own in re- 
gard to the correctness of its conclusions. 

Richard T. Ely. 
University of Wisconsin 
February, ipo6 


Preface vii 

Introduction xi 


Introductory and Historical 


I Economic and Legal Presumptions Against 

a Living Wage 3 

II Some Authorities in Favor of an Ethical 

Standard for Fixing Wages 23 


The BasiSj Nature, and Content of the 
Right to a Living Wage 

III The Basis and Justification of Rights 43 

IV The Right to Subsistence and the Right to 

a Decent Livelihood d"] 

V The Right to a Personal Living Wage 81 

VI The Right to a Family Living Wage no 

VII A Concrete Estimate of a Living Wage 123 


Economic Facts by Which the Right is 

VIII The Underpaid Laborers of America: their 

Number and Prospects 153 



Our Industrial Resources and 

a Living 

Wage for All 



The Forces that Regulate Price 















The Obligations Corresponding to the 

XV The Obligation of the Employer 237 

XVI The Obligation of the Loan-Capitalist, the 

Landowner, the Consumer, and the Man 

of Wealth 262 

XVII The Obligation of the Laborer 280 

XVIII The Obligation of the State 297 

XIX Summary and Conclusion 324 

Works of Reference 333 

Index 341 




Economic and Legal Presumptions Against a 
Living Wage 

Wages at present determined by the unlimited use of bar- 
gaining power. Attitude of the bargainers toward the 
moral aspects of the wage-contract. The theory of a wage- 
fund. The supposed effect of economic laws. Nature of 
an economic law, and sense in which it determines the rate 
of wages. Teaching of the classical economists, and pre- 
sumptions underlying it. Adam Smith's belief in individual 
liberty and enlightened self-interest shared by all his follow- 
ers. These assumptions discredited by the facts of English 
industrial history, and rejected by present day economists. 
Modern legislation recognizes the method of unlimited bar- 
gaining. Causes of this attitude. Economic and legal pre- 
sumptions against a moral standard of wages are invalid 
because their basis is unsound. 

I. The Present Method of Fixing Wages.— The 
doctrine that every laborer has a moral right to a 
Living Wage is obviously in direct conflict with 
existing business practice and theory. In the great 
majority of wage-contracts, a decent livelihood for 
the worker is not among the aims that are conscious- 
ly and earnestly sought by both parties. Sometimes 
it is not explicitly thought of by either of them. 
The amount of remuneration, as well as the hours 
and other conditions of employment, are fixed by 



the method of bargaining, according to which both 
employer and employee try to obtain the best terms 
possible. The latter strives to get as much as he 
can ; the former, to pay no more than he must. Both 
will derive some advantage from the bargain, but 
more for one will mean less for the other. The 
greater share of gain will be reaped by the stronger 
bargainer. When, through a combination of labor- 
ers, or employers, or both, collective is substituted 
for individual action, the end, the procedure, and 
the determining factors are essentially the same : the 
decisive element is not moral, but psychical and 
economic, namely, the relative bargaining power of 
the contracting parties. 

There are, indeed, many wage-contracts in which 
bargaining power has no place, and many others in 
which it is not the final determinant. The remuner- 
ation of a large proportion of government employees 
is fixed by law, and in some of the older trades and 
services bargaining is limited by custom.^ Again, 
there are to be found employers who will not force 
wages below what they regard as a fair level, just as 
there are laborers who will not exact compensation 
that they believe to be unjust. On the whole, how- 
ever, the labor-contracts affected by these forces of 
law, custom and moral convictions are exceptional.- 

So much for the prevailing practice ; what of the 
underlying ethical theory? Are the laborers who 

'Cf. Nicholson, "Principles of Political Economy," I, p. 325. 

' Instances where the employer, believing in the "economy 
of high wages," willingly pays more than the bargaining power 
of the laborer could command, do not constitute exceptions to 
the general rule, for even here the former tries to get his work 
done as cheaply as possible. 


try to get all that they can, and the employers who 
pay no more than they must, utterly indifferent to 
the questions of right and wrong involved in the 
wage-contract? Or, has business become so widely 
separated from ethics that, although desirous of 
being fair to each other, the parties to the labor- 
contract do not advert in any way to its ethical as- 
pects? Or, do they explicitly maintain that, despite 
frequent and grave differences in the bargaining 
power of the parties, the transaction is essentially 
just? All three of these attitudes are undoubtedly 
represented among both employers and employed. In 
fixing wages, as in other actions, there are men who 
will not hesitate to gain their ends by deliberate 
dishonesty and extortion. Others ignore the moral 
side of the wage-contract merely because it does not 
attract their attention ; they are conscious only of a 
business transaction. The greater number, however, 
of those who strive to make the best possible bar- 
gain, regardless of any formal ethical standard of 
wages, seem to think that the contract is fair, inas- 
much as it is free and made under the rule of com- 
petition. To a very large extent this notion, as well 
as the attitude of those who quietly ignore the moral 
aspect of the rate of wages, is the result of practical 
deductions from the teaching of the earlier English 
political economists. "Indeed we may say that 
political economy has importantly modified ethical 
conceptions ; so that the price which com- 
petition tends at any time to fix as the market price 
of any kind of services, has been taken to represent 
the universal or social — and therefore morally 



valid — estimate of the 'real-worth' of such services."* 
Now if political economy warrants this popular 
conclusion it creates at once a presumption of some 
value in favor of the justness of wages that are de- 
termined by the method of unlimited bargaining. 
The method is apparently sanctioned by the 
authority of science. To what extent is this true? 
It will conduce to clearness if a distinction be 
made between political economy as a system of 
supposedly rigid laws, and the practical precepts 
that have been laid down for the guidance of in- 
dustry by a certain school of economists. 

II. Economic Law and the Rate of Wages. — ' 
Throughout the first three-quarters of the Nine- 
teenth century political economy was committed to 
the theory that the rate of wages was determined by 
forces beyond the immediate control of either 
laborer or capitalist.^ Wages, it was said, are paid 
out of the fund of capital that has been saved from 
the product of the past. The amount of this wage- 
fund at any time was regarded as absolutely pre- 
determined, and consequently not variable by agree- 
ment between the parties to the wage-contract. If 
any section of the laborers of a country succeeded 
in raising their wages some other section or sections 
would necessarily have their remuneration lowered. 
The general rate of wages was therefore fixed by 
an economic law that was as little subject to the wills 
and efforts of men as the law of gravitation. It 

* Sidgwick, "Principles of Political Economy," p. 504. 

• See chapter on "The Verdict of the Economists" in 
Webb's "Industrial Democracy." 



was consequently no more immoral than the action 
of the tides. 

Although the wage-fund theory is no longer held, 
either by economists or by intelligent men generally, 
an equally irrational belief in the power of econom- 
ic laws to prevent any lasting modification in the 
rates of wages by human action, seems to retain a 
considerable body of adherents. It is cherished for 
the most part by men who have a personal interest 
in keeping wages low, or whose mental horizon is 
circumscribed by limitations of personal experience, 
education, intellect or will. In their opinion, the 
most convincing reply that can be made to the de- 
mand that the wage-contract be moralized, seems to 
be the assertion that the rate of wages is fixed by 
economic law. Is the assumption valid ? and if so 
does the inference really follow ? 

According to Marshall, an economic law "is a 
statement that a certain course of action may be 
expected under certain conditions from the mem- 
bers of an industrial group."'- Hence a particular 
economic law merely declares that, given certain 
external conditions, men may be expected to per- 
form such and such economic actions. It does not 
say that they will act thus in all conditions, nor 
does it specify how frequently the assumed con- 
ditions will be present in actual life. For example, 
the law which causes the workers in the Southern 
cotton mills to be so poorly paid would not con- 
tinue to operate there in changed conditions, and 

^ "Principles of Economics," Book I, ch. VII. Cf, Ritchie, 
"Darwin and Hegel," ch. V ; Keynes, "Scope and Method of 
Political Economy," ch, VII. 



the existing conditions differ from those that obtain 
in the mills of Massachusetts. In the words of 
Marshall, "economic laws are applicable to a very 
narrow range of circumstances, which happen to 
exist together at one particular place and time, but 
quickly pass away." They are consequently quite 
different from the laws of mathematics, which are 
absolute and universal. The sum of the angles of 
a triangle will equal two right angles always and 
everywhere; but the law that an increase in the 
supply of labor lowers wages, will not produce the 
same effect among organized as among unorganized 

The question whether the rate of wages is fixed 
by economic law is chiefly a question of language. 
The affirmation is in a sense true, but it is not a 
very important or a very illuminating truth. At 
any rate, the inference drawn from it — that wages 
cannot be modified by human effort — is utterly in- 
valid, and indicates a complete misunderstanding 
of the character of economic laws. For the laws 
are operative only in certain conditions, are de- 
scriptions of what is likely to happen in certain con- 
ditions, and are consequently dependent upon con- 
ditions. But the conditions themselves — especially 
in the field of distribution — are in large measure 
under the control of men. Thus, it is an economic 
law that in a competitive regime wages are regulated 
by the inter-action of supply and demand, but these 
factors are partly determined by the wills of the 
buyers and sellers of labor. Supply will be re- 
stricted by a combination of laborers; demand, by 



a combination of employers. Some of the dog- 
matic assertions made concerning the inflexibihty of 
economic laws imply the notion that the latter are 
like the edicts of an all-powerful despot; whereas 
the simple fact is that they are to a considerable ex- 
tent moulded by the human beings whom they affect. 
A strong Labor Union might meet the objection of 
the employer, that efforts to get more pay must 
prove futile, since wages are fixed by economic 
law, with the declaration: "Yes, but we will help 
to make the law." 

The scope of economic laws is further restricted 
by the fact that they describe, not what men must 
do, but what they may be expected to do. Herein 
they differ from the laws of physical nature, which 
admit of no exception in the conditions to which 
they apply. The laws of economics are not con- 
cerned with purely physical forces, which operate 
uniformly, blindly and necessarily, but with human 
actions, and these are free. Hence, even where all 
the external conditions are suitable, a particular 
economic law may not work out its normal and 
expected effect. For example, the condition of 
supply and demand in a labor market may call for 
a reduction in wages, yet a generous employer may 
refrain from taking advantage of favorable con- 
ditions, may do otherwise than he is expected to do, 
and allow wages to remain at the present level. In 
a word, economic laws describe uniform tendencies 
rather than uniform modes of human action. 

Indeed, the custom of speaking of economic laws 
as producing, or tending to produce, certain effects 



is confusing and ought to be avoided/ Subjective- 
ly, they are merely statements of uniformity; ob- 
jectively, they are relations of uniformity. The 
element of compulsion or causality behind this 
uniformity is contained in certain physical, social 
and psychical forces. All of these can, to a greater 
or less extent, be counter-acted by forces within the 
control of man. In any concrete situation it is the 
comparative strength of the two sets of forces that 
decides the kind of economic action that will be pro- 
duced. Whether any class of underpaid laborers 
must continue to receive the meagre wages that the 
system of unlimited bargaining now assigns to them, 
depends upon whether the economic forces that pro- 
duce this result can be overcome by forces working 
in the opposite direction. The question has no real 
relation to the abstract bogey that is sometimes 
appealed to in the name of economic law. 

III. The Practical Teaching of the Econo- 
mists. — There is nothing, consequently, in the 
nature of economic laws to render existing rates of 
wages necessary, or the unrestricted use of bargain- 
ing power morally legitimate. Let us now see what 
warrant there is for the statement that economic 
writers have regarded a contract made under com- 
petitive conditions as just, and what value is to be 
attached to their pronouncements in this matter. 
In general, their views of the ethical aspects of 
economic facts ought to have special weight be- 
cause of their superior knowledge of the facts, and 

^ Cf. Bonar, "Philosophy and Political Economy," pp. 194- 



their superior facilities for applying ethical prin- 
ciples. The authority attaching to their opinions 
on the morality of unlimited free contract can be 
overcome only through an examination of the logical 
process by which they reached their conclusions. 

The assertion is sometimes made that economists 
have laid down no ethical doctrines of any kind, that 
their province is merely that of positive fact, and 
their work that of observation, analysis and in- 
duction. The best reply to this statement is an ap- 
peal to the facts of history. "While affecting the 
reserved and serious air of students, political econo- 
mists have at all times been found brawling in the 
market place."^ This is especially true of the 
"classical" or "orthodox" school of economists, who 
held undisputed sway in England during the first 
half of the nineteenth century. With the great 
majority of these, says Edward Cannan, "practical 
aims were paramount and the advancement of 
science secondary."- As a rule they were men of 
strong moral convictions, and, of course, advocated 
no practical policy that in their view would be at va- 
riance with the right. On the contrary, they taught 
more or less explicitly that the measures which they 
favored — notably, unlimited freedoin of competition 
and contract — would naturally and automatically 
bring about a regime of social justice. Professor 
Sidgwick, who cannot be accused of unfriendliness 
toward the traditional political economy, tells us that 
"the teaching of political economists has generally 

^ Toynbee, "Industrial Revolution," p. 25. 
'"Production and Distribution," p. 384. Cf. Hobson, 
"John Ruskin, Social Reformer," p. 99. 



pointed to the conclusion that a free exchange, with- 
out fraud or coercion, is also a fair exchange."^ The 
logic of their teaching, therefore, has been that 
wages freely bargained for would be just wages. 
What were the reasons that led them to hold and 
promulgate this theory? 

The political economy of Adam Smith was based 
partly on a priori assumptions and partly on induc- 
tion.^ The a priori principles that he assumed as 
valid and that did most to give his system its dis- 
tinctive character were (a) the philosophical doc- 
trine of an order, or law, of nature in favor of in- 
dividual freedom, and (b) the theological doctrine 
of an all-wise Being who will "maintain at all times 
the greatest possible amount of happiness." ^ The 
idea of a law of nature came to him principally from 
the Physiocrats and the political doctrinaires who 
flourished immediately before the French Revolu- 
tion; the ideal to which it pointed, individual free- 
dom, was the dominant aspiration of his age. The 
order of nature meant that system of relations be- 
tween man and man which had obtained or would 
obtain in a state of nature. The lazv of nature, con- 
sequently, required that political institutions and 
restraints be reduced to a minimum. This being 

^Article on "Political Economy and Ethics" in Palgrave's 

' See Ingram, "History of Political Economy," pp. 89-93 '> 
Cohn, "History of Political Economy," chapter on Adam 
Smith ; Cliffe-Leslie, "Essays in Political and Moral Phil- 
osophy," chapter on Adam Smith ; Toynbee, "Industrial 
Revolution," pp. 11-26; Sidgwick, "Principles of Political 
Economy," pp. 19, 20 ; Bonar, "Philosophy and Political 
Economy," chapter on Adam Smith ; Ely, "The Evolution of 
Industrial Society." chapter on "Industrial Liberty." 

•"Theory of Moral Sentiments," Part VI, sec. II, ch. III. 


accomplished, the equahty of men, which also was 
a part of the order of nature, would secure for them 
the greatest measure of well-being.^ Unlimited in- 
dividual freedom was the practical ideal of those 
"nature philosophers" who exercised so profound 
an influence upon Adam Smith. It was, indeed, the 
ideal of the age. Personal and political liberty was 
preached and longed for in England, France and 
America, as the one adequate remedy for the social 
ills then existing. Adam Smith sought to have il 
applied to industry. Every page of his writings, 
says Toynbee, "is illumined by one passion, the 
passion for freedom." The supreme need of the 
hour, to his mind, was the removal of those petty 
public and quasi-public restrictions that hindered 
in the industrial world freedom of movement and 
freedom of contact. Abolish these, and the laborers 
would of themselves be able to realize their natural 
economic equality and their longed-for economic 
prosperity. "All systems either of preference or 
restraint," he declared in a passage that has become 
famous, "being thus completely taken away, the ob- 
vious and simple system of natural liberty estab- 
lishes itself of its own accord." ^ 

It is surprising that Adam Smith, whose work 
abounds with proofs of his ability to observe facts 
accurately, could enunciate a principle so contrary 
to the fundamental facts of human nature and hu- 
man conduct. Then as now, it must have seemed 

* W. S. Lilly's interesting volume, "A Century of Revolu- 
tion," contains a thorough, though severe, criticism of the 
Revolutionary assumptions of liberty and equality. 

* "Wealth of Nations," Book IV, ch. IX, final paragraph. 



clear that the legal power to enter into contracts is 
not sufficient to obtain for men the conditions 
of well-being. Freedom from physical and politic- 
al coercion does not of itself render men truly free 
and equal in bargaining. The explanation seems to 
be found in Smith's second a priori principle, which, 
as so frequently happens with preconceived theories, 
prevented him from seeing conditions as they ac- 
tually were. This was the assumption of the all- 
pervading beneficence of the Author of Nature. 
Though man is by nature essentially selfish and aims 
only at his private gain, he is led by an "invisible 
hand" to promote the welfare of all. His most self- 
ish acts redound, at least in the long run, to the 
common good. Hence both individual and social 
prosperity and justice are best secured and con- 
served by allowing each to seek his own interests 
in his own way, by setting up the system of com- 
plete liberty, which is founded on the constitution 
of nature and the benevolent designs of nature's 

These two assumptions of the supreme value of 
individual Hberty, and the sufficiency of enlightened 
self-interest, were adopted in substance by all the 
great economists of England down to the middle of 
the nineteenth century. Most of them, indeed, 
cared little or nothing for — probably knew little of 
— the philosophical and theological prepossessions 
that underlay these theories of Adam Smith, but 
they had no hesitation in advocating as the correct 
principles of industrial action, abstention from com- 
bination and regulation, unlimited competition, and 



the fullest individual liberty.^ They did not, how- 
ever, preach competition and freedom of contract 
as invariable laws, to be disregarded only under the 
greatest peril ; that fault was committed by the pop- 
ular expounders of political economy, chiefly jour- 
nalists and politicians.- They did not explicitly 
contend that wages fixed by bargaining in competi- 
tive conditions would in every case be just. Indeed, 
their primary aim was not with distribution at all. 
Professor Sidgwick says that Adam Smith and his 
followers sought before all else the improvement of 
production.^ The question with them was how to 
make the national product as great as possible at a 
minimum of cost. And the answer seemed to them 
to lie in the one word, competition. That the ex- 
isting inequalities were far from ideal, they were 
well aware; but they thought that the injury re- 
sulting to production from any interference with 
competition would more than off-set the improve- 
ment in distribution.^ They made an unquestioning 
act of faith in the beneficent and leveling influence 
of competition. " Unrestricted freedom of action 
and contract would tend to reduce the actually in- 
evitable inequality of economic opportunities to the 
lowest attainable minimum." ^ With inequality of 
opportunity at a minimum, the prices of things, in- 

' Sidgwick, "Principles," p. 399; KejTies, op. cit., pp. 70-74. 
John Rae seems to be almost alone in opposing this view con- 
cerning the classical school of economists: "Contemporary 
Socialism," pp. 345-374, 2d edition. 

^ Cliffe-Leslie, op. cit., p. 21. 

^Op. cit., pp. 24, 396. 

*SjdgT^■ick, op. cit., pp. 22, 400. 

^Idem, p. 506. 



eluding the price of labor, would correspond as close- 
ly to the requirements of justice as could be expected 
in a world inhabited by human beings. Now, this the- 
ory of the equalizing force of unfettered competition 
and unlimited freedom of contract, together with a 
very inadequate observation of the facts of indus- 
trial life, formed the basis of whatever claims the 
older economists had to be regarded as judges of the 
morality of wages fixed by the method of unlimited 
bargaining. That their theory was false and their 
study of facts one-sided,^ was abundantly proved by 
the industrial experience of the land in which the 
theory was most widely preached and most thor- 
oughly tested. The rise of the factory system in 
England and the introduction of the policy of 
laissez-faire were, indeed, followed by a remarkable 
increase in the production of wealth; but inequal- 
ities of opportunity were not reduced to a minimum ; 
the remuneration of labor did not tend to conform 
to a measure of substantial justice. Nearly the 
whole of the increase in wealth went to the newly- 
made capitalists,^ while the wages received by the 
laborers were barely sufficient to keep them alive. 
The leveling influence of competition was confined 
to the ranks of the workingmen, and its tendency 
was invariably downward. Starvation wages com- 
pelled husbands and fathers to send their wives and 
children into the mills, with the result that their 

* Regarding the incomplete inductions of the classical econ- 
omists, see : Marshall, "Principles," Book I, eh. IV, par. 6 ; 
Hobson, "The Social Problem," pp. 28-30 ; Ruskin, "Unto 
This Last." essay i. 

* Gibbins, "Industry in England," p. 381. 



own pay was still further reduced through this un- 
natural competition between husband and wife, be- 
tween father and child. To such an extent did 
women and girls supersede men in the manufactur- 
ing industry that the latter frequently were obliged 
to remain at home to attend to the duties of the 
household. Children from the workhouses were 
impressed into the factories under a system of ap- 
prenticeship that rendered their existence "literally 
and without exaggeration that of slaves." In a 
word, "the obvious and simple system of natural 
liberty" advocated by Adam Smith and his suc- 
cessors, brought, instead of a regime of justice, a 
period of horror that is known in economic history 
as the period of English Wage-Slavery.^ 

That these beliefs and hopes of the classical 
economists concerning the ethical efficacy of com- 
petition were utterly mistaken, is well understood 
by the economists of to-day. The latter realize 
very clearly that in some lines of production, at any 
rate, the natural and normal result of the competi- 
tive system is to have "our work done by a large 
number of low-grade laborers, instead of by a com- 
paratively small number of high-grade laborers."^ 
Whole classes of laborers, for example, those em- 
ployed in sweat shops, are "'underpaid, underfed 

^ For a general description of this period, see : Gibbins, op. 
cit. pp. 381-406; "Alfred," "History of the Factory Move- 
ment" ; Taylor, "Modern Factory System" ; Engels, "Condi- 
tion of the Working Classes in England" ; Carlyle, "Past and 
Present," Books I and III. 

^ Hadley, "Economics," sec. 361. Cf. Lavasseur, "The 
American Workman," p. 449 ; and in particular, Walker, "The 
Vv'^ages Question," chapter on "The Degradation of Labor." 

2 17 


and undersupplied with everything which contrib- 
utes to civiUzed Hfe." Contemporary economists 
feel and acknowledge that conditions such as these 
are at variance with the requirements of justice. 
They are consequently desirous that competition 
should be modified in various ways: by custom, 
philanthropy, labor organizations and moderate leg- 
islative action. Beyond this the majority of them 
seem unwilling to go. In so far as they touch the 
ethical aspect of the matter at all, they seem to hold 
that the system of bargaining for wages satisfies the 
demands of justice as fully as is at present practic- 
able. The question of replacing the practice of un- 
limited bargaining with a definitely moral standard 
of wages is discussed not so much from the stand- 
point of ethics, as from that of feasibility. This is 
especially true of their attitude, in so far as they 
have any, toward the standard of a Livmg Wage. 
Their contention seems to be that even if this stand- 
ard could be established in practice, for example, 
by legislation, it would be productive of more social 
harm than good. Professor Smart rejects the 
Living Wage, and defends the present method of 
unlimited bargaining on the ground that no more 
satisfactory plan is workable outside of socialism.* 
The existing freedom of contract secures for all "a. 
certain rough kind of justice." President Hadley 
likewise declares against the Living Wage as im- 
practicable, and accepts the sliding scale as the fair- 

^ "Studies in Economics," chapter on "A Living Wage"; 
and "Distribution of Income," ch. XXVIII. 



est method of determining wages that has yet been 
proposed. ^ 

The position of the two writers just named prob- 
ably reflects the general views of all present day 
economists except those who profess to give more 
than usual attention to the moral aspects of in- 
dustry. These naturally lay greater stress on the 
immorality of unlimited bargaining, and pay less 
attention to the difficulties in the way of a better 
method. ^ 

IV. The Attitude of Nineteenth Century Leg- 
islation Toward Unlimited Bargaining. — Since the 
beginning of the Nineteenth century the laws of 
England have allowed the fullest freedom of con- 
tract in the determination of the wages to be paid 
for all except government work. England is men- 
tioned particularly because the history of her legis- 
lative attitude toward the wage-contract during the 
last century is typical of the greater part of Europe 
and of the whole of North America, and because 
she was the first to adopt the policy of non-regula- 
tion. The causes of the changed attitude of the 
law are very much the same as those which induced 
the economists to advocate unlimited competition 
and freedom of contract. The Industrial Revolu- 
tion had rendered the old regulations of industry 
inadequate and harmful, and the dominant political 
ideal of the day was wider liberty for the individual. 
Thus the champions of non-interference with the 

^"Economics," sees. 404-406. Cf. Leroy-Beaulieu, "Traite 
theorique et pratique," vol. ii, p. 484, sq. 

* Cf. Ely, "Outlines of Economics," p. 206, ist edition; 
Hobson, "The Social Problem," chaps. II, VII. 



industrial activity of the British subject were able 
to enforce their theoretical arguments by pointing 
to the disastrous results of the opposite policy. 
Prominent among these champions were the econ- 
omists, whose influence upon English legislation 
during the first half of the Nineteenth century has 
not been equalled in any other time or country. 
Ricardo alone, we are told by Toynbee, revolution- 
ized the economic thought of the British Parliament 
during his brief stay in that body. Again, the mid- 
dle classes, who were rapidly gaining in wealth and 
political power, urged the laissez-faire policy be- 
cause they felt that "with freedom they were more 
than a match for all competitors." The effect of 
these combined forces was to restrict state regula- 
tion of industrial life to the narrowest proportions 
known to history. 

The causes of the regime of non-interference in 
America are included among those just described. 
The influence of the economists was not as great as 
in England ; but the cult of individual freedom, and 
the self-confidence and self-assertion of the middle 
classes, were for a long period the dominant forces 
in shaping, both positively and negatively, the course 
of legislation regarding industry. 

Obviously, the attitude of the civil law toward 
the wage-contract, or toward any other human 
action or institution, is not per se a criterion of the 
morally good. The ordinances of legislatures are 
not always in accord with the principles of right 
and justice. The fact that the laws of a country 
allow its citizens by means of free contract to depress 



wages to the starvation level, or enhance them be- 
yond the limits of extortion, does not make the 
transaction just; but, since legislatures should, and 
generally speaking do, endeavor to promote just 
dealings in the more important social relations, 
there arises a presumption in favor of any institu- 
tion that the law sanctions and protects. 

In the present case the presumption vanishes as 
soon as we examine the causes of the legislation. 
As above described, these causes may be reduced to 
three : the insufficiency of the old restrictions ; the 
fancied sufficiency of individual freedom; and the 
selfishness of the middle classes. The first afforded 
a good reason for such new legislation as would be 
appropriate to the new conditions of industry, but 
not for the anarchical policy of non-interference; 
the second was a hypothesis that has been utterly 
discredited by the subsequent history of industrial 
development, — individual freedom has not brought 
either economic equality or economic justice ; while 
the third should have been checked, instead of 
fostered, by legislation. 

The presumptions in favor of the existing method 
of fixing wages and against the principle of a Living 
Wage which are drawn from the teaching of polit- 
ical economy and the attitude of the law, disappear, 
therefore, when we realize the reasons upon which 
this teaching and this attitude were based. Eco- 
nomic laws are not inexorable, are not independent 
of the wills of the men whose actions they describe, 
do not compel wages to be adjusted by an unlimited 
use of the economic strength of the bargainers, and 



do not render existing rates of wages just. The 
practical recommendations of the economists and 
the ordinances of the legislators can be traced to 
false principles, false reasoning, incomplete analy- 
sis of facts, and the selfishness of the dominant in- 
dustrial class. Consequently the doctrine of a Liv- 
ing Wage cannot be refuted or put in peril by any 
mere appeal to economic or legal authority. The 
contention of those economists of our own time who 
maintain that a Living Wage is impossible of appli- 
cation will be examined later. In the meantime it 
will, perhaps, not be unprofitable to review briefly 
the chief authorities, contemporary and historical, 
that are against the method of unrestricted bargain- 
ing and in favor of a professedly ethical standard. 



Some Authorities in Favor of an Ethical 
Standard for Fixing Wages. 

Wages in England formerly regulated by law. Quasi-le- 
gal regulation through the gilds, custom, and the regula- 
tion of the price of goods. Teaching of Catholic authorities 
on the right to a livelihood and on just price. And on the 
customary rate of wages. Teaching of Leo XIII on a Liv- 
ing Wage. Was not the first to declare this principle. At- 
titude of representative Protestants. Contemporary opinion 
in favor of the Living Wage principle. Attitude of the lab- 
or unions. Some instances of a legal minimum wage. Con- 
clusion that the weight of opinion is against the method of 
unlimited bargaining. 

I. Legislation Concerning Wages. — The policy 

of indifference which nearly all governments pursue 
with reference to the wage-contract to-day has not 
prevailed always. From the year 1349 to the year 
1563 the remuneration of the unskilled laborers of 
England, both in town and country, was regulated 
by law, by the various "Statutes of Laborers" that 
were re-enacted or amended by nearly every mon- 
arch that reigned during those two centuries. In 
the last named year was passed the famous "Statute 
of Elizabeth," which applied not only to the un- 
skilled workers, but "to the greater part of the in- 



dustry of the period."^ It continued on the statute 
oooks down to 1813, when, at the bidding of capital- 
ists and poHtical economists, but against the protest 
of the laboring class, it was "peremptorily repealed." 
A great economic historian has contended that from 
first to last these laws regulating wages were de- 
signed to, and actually did, benefit the employer at 
the expense of the workingman. The first of them 
was, indeed, framed for the express purpose of re- 
ducing the unusually high wages which prevailed 
in consequence of the Black Death of 1348. In 
general, the legal rate of wages was for a long time 
a maximum which both master and man were for- 
bidden to exceed, and the "Statute of Elizabeth" 
was almost invariably administered unfavorably to 
the laborer. According to the provisions of this 
act, wages were fixed by the justices of the peace, 
who were in most cases employers or men friendly 
to the employing class. This policy, together with 
the disastrous effects of the debasement of the 
currency and the confiscation of the gild lands by 
Henry VIII, and the progressive separation of the 
workers from their little plots of land and from 
their rights over the Common, had no doubt gone 
very far toward making "low wages and famine 
wages traditional." ^ And yet we find that again and 
again during the eighteenth century the working- 
men appealed to the justices and to the House of 
Commons to enforce and re-establish the legal regu- 

^ Webb, "History of Trade Unionism," p. 42. 
' Thorold Rogers, "The Economic Interpretation of His- 
tory," p. 43. 



lation of wages, ^ However this may be, the ques- 
tion that concerns us now is not whether the laws 
fixing wages were favorable to the laborers, but 
whether the English people did not for centuries be- 
lieve that wages determined by free contract were 
not necessarily just. That they believed in an ob- 
jective standard of justice, a standard independent 
of the terms of the wage-agreement, is evident from 
their continued efforts to regulate the remuneration 
of labor by law. ^ 

The policy of legal regulation was carried out not 
only by means of the formal enactments just de- 
scribed, but also through the rules and customs of 
the gilds. During a considerable part of the 
Middle Ages the rates of wages determined by the 
gilds had virtually all the force of public laws. 
There was, moreover, an indirect regulation through 
the legal or quasi-legal regulation of the price 
of goods. If a gild was able to fix wages so 
effectively that no one ever thought of departing 
from them, it performed the essential functions of 
a civil legislator; and if the central authority, or 
the municipality, or the gild, or even custom, deter- 
mined the price of goods it virtually determined 
the price of labor. And this legal supervision of 
the rewards of labor, direct or indirect, explicit or 

^ Webb, "History of Trade Unionism," pp. 42-54. 

'A detailed account of the different "Statutes of Laborers" 
enacted by the English Parliament will be found in Thorold 
Rogers "Economic Interpretation of History," ch. II. See al- 
so articles, "Government Regulation of Industry," "Laissez- 
Faire," and "Statute of Laborers," in Palgrave's Dictionary 
of Political Economy. 

' See Brants, " Theories economiques aux xiiie et xi\'e siecles," 
p. 201, sq. 



virtual, seems to have prevailed not only in England 
but throughout Western and Southwestern Europe 
during the whole of the later Middle Ages, The 
accepted principle of medieval society, say Sidney 
and Beatrice Webb, was that some kind of social 
organization was necessary in order to protect the 
standard of life of the workers, and to prevent their 
degradation.^ The sense of solidarity, mutual de- 
pendence and mutual responsibility among the mem- 
bers of a community, the conviction that the indus- 
trial world should be ordered by law, rather than 
left to individual caprice and selfishness, were far 
more prominent in the thought of that period than 
they are to-day. ^ Hence, "every sort of economic 
transaction in which individual self-interest seemed 

to lead to injustice " was regulated "by the 

general principle that a just or reasonable price only 
should be paid."^ 

II. The Teaching of Christian Theological and 
Ethical Writers. — This attitude of the public and 
of legislators was the result of Christian conceptions 
of fair dealing, and of the widespread influence of 
the Christian Church, Christianity succeeded in 
the Middle Ages in "moralizing industrial and 
commercial conceptions and institutions," and it 
impressed men "with a keen sense of personal re- 
sponsibility in the employment of secular power of 
every kind."* It was the uniform teaching of the 

^"History of Trade Unionism," p. 19. 

' Cf. Gierke, "Political Theories of the Middle Age," p. 7. 
sq., translated by Maitland. 

'Ashley, "English Economic History," vol. i, p. 181. 

* Cunningham, "Western Civilization," vol. ii, pp. 104, lOS. 



Fathers of the Church and of the medieval theo- 
logians that every human being had an imperishable 
right to a livelihood from the common bounty of 
nature. This they regarded as a natural right, in- 
dependent of and superior to all human laws, con- 
ventions and institutions. According to this doc- 
trine, therefore, the laborer was endowed with an 
absolute right to at least sufficient remuneration 
to maintain his life. Moreover, the principle that 
the laborer should receive just wages was virtually 
contained in the canonist doctrine of just price. 
The theologians and canonists held that every 
commodity had a certain fair valuation, or just price, 
which was independent of the arbitrary and fortui- 
tous valuation resulting from the higgling of the 
market.^ The just price in any market being deter- 

^The somewhat puzzling doctrine of "just price" is not 
always understood by either its critics or its defenders. 1 he 
former sometimes assert that it was based on an incorrect 
analysis of the phenomena that give rise to commercial values, 
individual and social. This is a complete misconception ; for 
the doctrine in question was not an attempt to explain the 
actual, but to describe the ideal. Comparisons instituted be- 
tween it and modern theories of value are, therefore, entirely 
irrelevant. A theory of value is a scientific explanation of 
the ultimate causes of the values that prevail or tend to pre- 
vail in a regime of free contract. Now the medieval writers 
concerned themselves very little with this question : First, be- 
cause values and prices were in their time fixed for the most 
part by law or by custom ; and, second, because their main pur- 
pose was to lay down rules for knowing the price at which a 
thing ought to sell, not to tell the price at which it would sell. 
Even if they had held, as some modern writers have asserted, 
that the just price of a commodity was something strictly in- 
trinsic — a belief that cannot be correctly attributed to any one 
of them — their teaching would not conflict with economic 
theories of value. (Cf. Cunningham, "Western Civilization," 
vol. ii, pp. 78-80.) The doctrine of just price may sometimes 
have been associated with incorrect views of industrial life, 
but all competent authorities agree that it was a fairly sound 



mined by the appraisement of the general pubHc, it 
was said to be measured by the "communis aesti- 
matio." To ascertain the just price of any article, 
account had to be taken of its general utility, scar- 
city and cost of production. The last element, which 
in the Middle Ages was chiefly represented by labor 
expenditure, was regarded as the most important. 
When, therefore, the medieval theologians and 
canonists taught that a just price should be paid for 
every commodity, and that its chief determinant was 
Iribor-cost, they virtually insisted that the laborer 
should be paid just wages.^ 

To the searcher for explicit and precise rules for 
determining what is a fair remuneration for labor, 
the medieval writers are, indeed, disappointing. 
St. Thomas Aquinas says that, as justice demands 
that a fair price be paid for a material commodity, 

attempt to define the equities of medieval exchanges, and that 
it was tolerably successful in practice. 

On the other hand over-zealous apologists of the doctrine 
have tried to show that the "communis aestimatio," which was 
held to be the proximate criterion of just price, is essentially 
the same as that complex of social forces that fixes present 
market prices, and that some modern writers have called "the 
social estimate." The resemblance is only of name. The com- 
mon estimate of which the canonists spoke was a conscious 
social judgment that fixed prices beforehand, and was ex- 
pressed chiefly in custom, while the social estimate of to-day 
is in reality an unconscious resultant of the higgling of the 
market, and finds expression only in market price. 

For a complete exposition of the doctrine of just price, 
with abundant citations and references, see : "LTdee du jviste 
prix," by Henri Garnier ; and "Allgemeine Grundlagen der 
Nationaloekonomie," ch. XV, by Julius Costa-Rosetti. Brants 
in the work already cited, chap. V. and p. 193 ; Ashley in 
"Economic History," vol. i, p. 134, sq. ; and Cunningham in 
"Growth of English Industry," vol. i, p. 323, sq., are also quite 

* Cf . Brants, op. cit., pp. 107-116. 


so it demands that a fair price should be given for 
human labor. ^ Other writers likewise content 
themselves with the general declaration that wages 
should be in accordance with justice. Their failure 
to be more specific seems to be explained by the 
industrial conditions of the time. During the great- 
er part of the Middle Ages there was, properly 
speaking, no such thing as a wage system ; for there 
was no class of laborers, either in town or country, 
depending solely on employers to whom they sold 
their labor. ^ The master craftsmen in the towns 
and the men who tilled the soil on their own account, 
received just wages if they received a just price for 
their products. Even after the rise of a distinct 
laboring class — that is, men who could never hope 
to become master craftsmen, or men who spent the 
greater part of their time in the service of the lords 
of the domain — the question of just wages was not 
of supreme importance. In town industries the 
journeymen were quite commonly fed and lodged 
by their employers ; ^ the relations between masters 
and journeymen were akin to those existing between 
father and sons ; * and between the average earnings 
of the two classes there was not a great difference. ^ 
Agricultural laborers usually had possession of a 
piece of ground, to the cultivation of which they 
^"Summa Theologica," la. 2ae., q. 144, a.i. 

* Gibbins, op. cit., vol. ii, p. loi ; Ashley, op. cit., vol. ii, p. 
loi ; Levasseur, "Histoire des classes ouvrieres avant 1789," 
vol. I, p. sg8. 

'Levasseur, op. cit., vol. i, p. 455 ; Brants, op. cit., p. 123 ; 
Martin-Sainte-Leon, "Histoire des corporations des metiers," 

p. 155. 

* Ashley, op. cit., vol. ii, p. 103. 

'Levasseur, op. cit., vol. i, p. 313; Brants, op. cit., p. 123. 


devoted their leisure time, and from which they ob- 
tained part of their sustenance. ^ These conditions 
were not, indeed, universal, nor did they always 
secure for the laborer a reasonable living, but they 
explain sufficiently the failure of medieval writers 
to treat specifically the question of just wages. 

Later on, when the wage-earning class assumed 
greater proportions, we find the ethics of their 
remuneration explicitly discussed by theological 
writers. Molina, De Lugo, and Bonacina, writing 
about the beginning of the seventeenth century, 
declare that in general that wage is just which is 
customary for a given service in a given place.^ The 
two first mentioned say that a wage insufficient for 
the subsistence of some laborers, will nevertheless 
be fair when there are many who willingly sell their 
services for that amount. We are told that numer- 
ous workers do accept this lower wage, either be- 
cause they have other sources of income, or because 
they can live more cheaply than fellow members of 
their own class. From the context it would seem 
that both Molina and De Lugo assume that the 
laborer has a right to a living from his toil, and that 
their chief concern in the passages cited is with cases 
in which the circumstances are exceptional. ^ At 
any rate, they do not discuss the question of a Liv- 
ing Wage adequately and in all its relations. The 
only general standard of just remuneration that they 

^ Gibbins, op. cit., p. iii. 

* Molina, "De Contractibus," disp. 506, nos. 2, 3, 4 ; De 
Lugo, "De Jure et Justitia," disp. 29, no. 62 ; Bonacina, "De 
Contractibus," disp. 3, q. 7. 

^ Cf. Vermeersch, "Quaestiones de Justitia," pp. 572, 573 ; 
Pettier, "De Jure et Justitia," pp. 234-241. 



lay down is custom. Whether the customary wages 
of those days compHed with the requirements of a 
Living Wage, as then understood, is not easily 
determined. However, since wages remained sta- 
ble during long periods of time, and since the direct 
influence of religious and moral teaching on eco- 
nomic life was very considerable — much greater 
than at present — it may well be that the essentials of 
a reasonable wage were fairly well realized. 

From the time of the writers just mentioned 
down to the year 1891, the theological and canonist 
doctrine on the ethics of wages seems to have 
undergone no important development. The old 
phrases about customary wages and just wages are 
constantly recurring. A curious instance of this 
unprogressiveness is found in the pages of the canon- 
ist, Reiffenstuel, one of the ablest authorities on the 
legislation of the Church. He maintained that it was 
wrong for an employer to pay a laborer less than 
was usual in similar circumstances, but that when 
the usual wage was paid all obligations of justice 
were satisfied, even though it did not suffice for a 
livelihood.^ According to this interpretation, the 
"customary wages" of the medieval theologians 
and canonists become "current wages," and the 
"common estimate" of just wages becomes the wa- 
ges that men actually pay in the strife of competitive 
bargaining. What was in the minds of the School- 
men a conscious moral judgment is thus converted 
into an unconscious resultant of men's efforts to buy 

*"Jus Canonicum," lib. Ill, Decretal., tit. XVIII, nos. 108- 



cheap and sell dear. The author's principle would 
justify starvation wages if these were common to a 
whole class. 

In the year 1891, the late Pope Leo XIII formu- 
lated the doctrine of a minimum Living Wage in 
his celebrated encyclical, "Rerum Novarum," better 
known by the title, "On the Condition of Labor." 
Its most important passages relative to the present 
matter are the following: 

"We now approach a subject of very great im- 
portance, and one on which if extremes are to be 
avoided right ideas are absolutely necessary. Wa- 
ges, we are told, are fixed by free consent, and there- 
fore the employer, when he has paid what was 
agreed upon, has done his part and is not called upon 
for anything further. The only way, it is said, in 
which injustice could happen would be if the master 
refused to pay the whole of the wages, or the work- 
man would not complete the work undertaken; 
when this happens the State should intervene to see 
that each obtains his own, but not under any other 

"This mode of reasoning is by no means convinc- 
ing to a fair minded man, for there are important 
considerations which it leaves out of view altogeth- 
er. To labor is to exert one's self for the sake of 
procuring what is necessary for the purpose of life, 
and most of all for self-preservation. Tn the sweat 
of thy brow thou shalt eat bread.' Therefore, a 
man's labor has two notes or characters. First of 
all, it is personal; for the exertion of individual 
power belongs to the individual who puts it forth, 



employing his power for the personal profit for 
which it was given. Secondly, man's labor is neces- 
sary; for without the results of labor a man cannot 
live ; and self-conservation is a law of nature which 
it is wrong to disobey. Now if we were to consider 
labor merely in so far as it is personal, doubtless it 
would be within the workman's right to accept any 
rate of wages whatever ; for in the same way as he 
is free to work or not, so he is free to accept a small 
remuneration or none at all. But this is a mere ab- 
stract supposition ; the labor of the workman is not 
only his personal attribute, but is necessary ; and 
this makes all the difference. The preservation of 
life is the bounden duty of each and all, and to fail 
therein is a crime. It follows that each one has a 
right to procure what is required in order to live: 
and the poor can procure it in no other way than by 
work and wages. 

"Let it be granted, then, that as a rule workman 
and employer should make agreements, and in par- 
ticular should freely agree as to wages ; nevertheless, 
there is a dictate of nature more imperious and 
more ancient than any bargain between man and 
man, that the remuneration must be enough to sup- 
port the wage earner in reasonable and frugal com- 
fort. If through necessity, or fear of a worse evil, 
the workman accepts harder conditions because an 
employer or contractor will give him no better, he is 
the victim of fraud and injustice." 

Pope Leo XIII was not, indeed, the first Catholic 
authority to proclaim this principle of a Living 
Wage. It had already been more or less explicitly 

3 33 


laid down and defended by Ketteler in Germany, 
Vogelsang in Austria, de Pascal in France, Pottier 
in Belgium, and Manning in England. ^ It was 
the principle of social justice that was clearest and 
most definite in the consciousness of those numerous 
groups of Catholic thinkers and agitators who dur- 
ing the preceding quarter of a century had been 
seeking a remedy for the industrial ills of modern 
Europe. It was at least a partial application to ex- 
isting economic conditions and institutions of the 
traditional theological and canonist doctrine of just 
price. Indeed, it was the activity of this Catholic 
social movement that, more perhaps than all other 
influences together, led the late Pontiff to issue the 
encyclical, "On the Condition of Labor." In a con- 
versation with the Swiss social reformer, Gaspard 
Decurtins, Pope Leo referred to the father of the 
movement. Archbishop Ketteler, as his "great fore- 
runner." Nevertheless, it was his encyclical that 
converted the Living Wage doctrine from an im- 
plicit into an explicit principle of Catholic ethics. 

Owing to the individualistic tendencies of Prot- 
estantism, its many forms, and the nature of its 
organization, the Protestant teaching on an ethical 
standard of wages as against the standard of un- 
limited bargaining, is less pronounced and less 
uniform than that of the Catholic church. It is, 
therefore, much more difficult of adequate presenta- 
tion in a brief survey. Attention may, however, be 
called to one or two important facts. No Protestant 
denomination has ever signified its approval of the 

^ Cf. Nitti, "Catholic Socialism," passim. 


principle of unlimited bargaining, either formally 
or through the expressions of its leading representa- 
tives. On the contrary, numerous and able repre- 
sentatives of the leading denominations have fre- 
quently protested against the doctrine, and insisted 
that to take advantage under the guise of a free 
contract of the necessities of the laborer is to violate 
the principles of Christianity. Chief among them 
are: Kingsley, Maurice, Hughes, and Headlam in 
England ; Pastors Stocker and Todt in Germany ; 
Gide and Waddington in France ; and Bishop Potter 
and Dr. Gladden in the United States. The first 
three groups of writers founded or identified them- 
selves with organizations for Christian social reform 
which have had a very large influence. ^ 

III. Contemporary Opinion Regarding an 
Ethical Standard of Wages. — The ethical theory 
underlying the method of unlimited bargaining, 
namely, that contracts made without force or fraud 
are necessarily fair, is, despite the prevailing prac- 
tice, condemned by the majority of disinterested 
persons. This attitude of mind is most clearly 
shown in the widespread conviction that the ex- 
orbitant prices charged and the enormous profits 
obtained by some of the great trusts are not only a 
menace to public welfare, but positively unjust and 
dishonest. ^ Yet the contracts by which this result 
is brought about are all free. Speaking of the 
exorbitant profits made by a prominent corporation 
in the manufacture of steel rails, a capitalist and ex- 

^ Cf. Nitti, op. cit., pp. 85-99 ; and Rae, "Contemporary 
Socialism," pp. 220-242. 

^ Cf. Sidgwick, "Methods of Ethics," p. 288, 6th ed. 



senator of the United States not long ago declared : 
"If this is not robbery I would like to find some 
stronger word to characterize it." With this view 
practically the whole of the American people would 
agree. Nevertheless, the purchasers of steel rails 
are neither deceived nor coerced; the transaction is 
free. Again, the money shark who trades on the 
distress or ignorance of the poor by charging ex- 
orbitant rates of interest, gives his victims the 
benefit of a free contract ; yet he is restrained by the 
civil law and condemned by the public conscience. 
Similarly with bargains where the subject matter 
is human services. A drowning man calls to an- 
other for help. The latter replies : "I will save you 
if you pay me a million dollars." The distressed 
millionaire prefers life on this hard condition to 
death without it, and quickly closes the contract. 
The contract was free, was a source of some gain 
for both parties, but who would affirm that it was 
just? And the employer who takes advantage of 
the need of his fellow man and hires him at starva- 
tion wages, has merely made a free bargain. The 
laborer agrees to the harsh conditions because they 
mean for him the preservation of life; they repre- 
sent an advantage as compared with the alternative 
of starvation. Still, with the exception of the em- 
ployer and those who look at the matter from his 
point of view, the entire community would insist that 
somehow the transaction was wrong. In the words 
of Dr. Cunningham, "we feel that it is unfair for 
the economically strong to wring all that he can out 



of the economically weak." ^ Hence, in a dispute 
between an employer and his poorly-paid laborers, 
public sympathy is invariably on the side of the 
latter. Indeed, it may be said with confidence that 
the common sense and unbiased convictions of the 
community not only repudiate the theory that free 
contracts are always just, but maintain that when 
the laborer is compelled to accept less than a cer- 
tain decent minimum of remuneration he is in truth 

Belief in the Living Wage principle has always 
been more or less firm in the consciousness of the 
laborer himself, but only recently has it taken the 
form of an explicit demand. - In England the 
right to a minimum of pay has become one of the 
fundamental assumptions of Trade Unionism. "It is 
a vital principle," says one of the Trade Union lead- 
ers, "that a man by his labor should live, and not- 
withstanding all the teachings of political economists 
and all the doctrines taught by way of supply and 
demand, a greater doctrine overrides all these, the 
doctrine of humanity." ^ 

The Labor Unions of America do not often use the 
phrase, "a Living Wage," nor explicitly outline the 
concept that it represents, but they express the 
same idea in their "Union Scale." This is the rate of 
wages that the Union demands for its members in 
any particular industry. It is in reality the mini- 
mum that the Unionists regard as compatible with 

^ "Western Civilization," vol. ii, p. 80. 

' Webb, "Industrial Democracy," p. 582, sq. 

'Idem, loc. cit. 



right living. They reject, therefore, the standard 
of unHmited bargaining, inasmuch as they estabHsh 
a minimum; and they substitute the standard of a 
Living Wage, inasmuch as they look upon this 
minimum as the lowest rate for which a man ought 
to work. It might be objected that the Union Scale 
is not intended to be an ethical standard, but merely 
represents what the Unionists think they are strong 
enough to obtain. It is true that they try to get as 
high a wage as possible, but this is a matter of prac- 
tical policy arising out of actual conditions. Behind 
it is always the conviction that there is involved a 
question of morals. They believe that they ought 
to have at least sufficient remuneration to afford 
them a decent livelihood. Many of them, indeed, 
hold that they have a right to more than this 
minimum ; but this is merely an additional proof 
that the idea of an ethical standard is present to 
their consciousness. ^ 

Nor is the principle of the minimum wage entire- 
ly unknown to existing legal codes. The Compul- 
sory Arbitration act of New Zealand decrees that 
minors shall not be employed in factories for less 
than a certain sum per week, and that all laborers 
on public contracts shall receive at least the rates of 
wages that "are considered usual and fair in the 
locality." In Victoria, Australia, legal boards have 
been created with authority to establish a minimum 

^ Cf. the address, "A Living Wage," delivered by President 
Gompers before the Nineteenth Century Club, and printed in 
the "American Federationist" for April, 1898; also the testi- 
mony of Presidents Gompers and Schaffer before the U. S. 
Industrial Commission ; vol. vii, pp. 397, 614 of the Report 
of the Commission. 



wage, for the express purpose of preventing the 
remuneration of any class of workers from being 
reduced below the cost of living. And the New 
Zealand Court of Arbitration is empowered to fix 
a minimum wage that will apply, not only to the 
parties interested in any particular dispute, but to 
all who are "connected with or engaged in the indus- 
try to which the award applies within the industrial 
district to which the award relates," 

The brief discussion of the authorities for and 
against the practice of unlimited bargaining con- 
tained in this and the preceding chapters, is not, of 
course, an adequate historical review of the subject. 
It has, however, a certain value, inasmuch as it gives 
some notion of the different attitudes which men 
have taken toward the ethical side of the wage-con- 
tract. For if there is any field of study in which 
principles stand out in clearer light when they are 
seen as others see them, it is the field of ethics, and 
especially of applied ethics. Every new viewpoint 
that is taken, every new opinion, no matter how fan- 
tastic, that is considered, contributes something to 
our understanding of the nature and bearing of 
ethical truths. 

Our conclusions from the present study are : first, 
that men have always regarded the fixing of wages 
as in some degree an ethical action ; and, secondly, 
that the preponderance of human opinion is decided- 
ly against the method of unlimited bargaining. The 
belief that the amount of remuneration given the 
laborer is entirely devoid of moral aspects, in other 
words, that "there is no such thing as fair wages," 



has never been held by any considerable section of 
any community. Either explicitly or implicitly men 
have always been virtually unanimous in the con- 
viction that the standard for determining wages 
should be a moral standard. Even the method of 
unlimited bargaining, which is on its face non- 
ethical, was advocated by economists and legislators 
chiefly because they believed that its results would 
be morally good. They expected it to bring about 
the greatest attainable measure of social iustice. 
Indeed, so long as men remain ethical beings, they 
cannot ignore the moral aspects of any particular 
policy that they recommend. ^ Finally, although 
the method of unlimited bargaining is the prevailing 
one, it is less than one century in existence, and was 
established through the mistaken efforts of econo- 
mists and legislators. Previously to that period, 
it was frowned upon by the political, religious and 
moral forces of society. It is condemned to-day, 
not merely by the laborers, but by the moral sense 
of the greater and saner part of the community. 

' Cf. Professor Foxwell's Introduction to Menger's "Right 
to the Whole Produce of Labor," p. xi. 





The Basis and Justification of Rights 

The claim to a Living Wage is a right. Character and 
purpose of rights. Sense in which natural rights are ab- 
solute. Men's natural rights are equal in the abstract, but 
unequal in the concrete. They are based on the duty of 
pursuing self-perfection. Other methods of establishing 
their validity. The doctrine of natural rights incompatible 
with individualistic hedonism. The positivistic theory of 
rights means in the concrete that some lives are worth less 
than others. It has less theoretical weakness when stated 
in terms of Hegelianism. Fallacy of the popular argument 
against natural rights. The exaggeration of natural rights 
in the system of the Revolutionary philosophers. The 
doctrine as here advocated holds a middle ground between 
semi-anarchism and state absolutism. 

The thesis to be maintained in this volume is that 
the laborer's claim to a Living Wage is of the na- 
ture of a right. This right is personal, not merely 
social : that is to say, it belongs to the individual as 
individual, and not as member of society; it is the 
laborer's personal prerogative, not his share of social 
good; and its primary end is the welfare of the 
laborer, not that of society. Again, it is a natural, 
not a positive right ; for it is born with the individ- 
ual, derived from his rational nature, not conferred 
upon him by a positive enactment. In brief, the 



right to a Living Wage is individual, natural and 

A right in the moral sense of the term may be 
defined as an inviolable moral claim to some personal 
good. When this claim is created, as it sometimes 
is, by civil authority it is a positive or legal right; 
when it is derived from man's rational nature it is 
a natural right. All rights are means, moral means, 
vv^hereby the possessor of them is enabled to reach 
some end. Natural rights are the moral means or 
opportunities by which the individual attains the 
end appointed to him by nature. For the present 
it is sufficient to say that this end is right and reason- 
able life. The exigencies of right and reasonable 
living, therefore, determine the existence, and num- 
ber, and extent of man's natural rights. Just as his 
intellectual, volitional, sensitive, nutritive and motive 
faculties are the positive, or physical, agencies by 
which he lives and acts as a human being, so his nat- 
ural rights are the moral faculties requisite to the 
same end. He cannot attain this end adequately un- 
less he is regarded by his fellows as morally immune 
from arbitrary interference. They must hold them- 
selves morally restrained from hindering him in the 
reasonable exercise of his faculties. His powers 
of intellect, will, sense, nutrition and motion will be 
of little use to him if his neighbors may licitly de- 
prive him, whenever it may suit their convenience, 
of his external goods, or his liberty, or his mem- 
bers, or his life. In addition to his positive powers, 
he stands in need of those moral powers which give 
to his claim upon certain personal goods that char- 



acter of sacredness which restrains or tends to re* 
strain arbitrary interference by his fellows. 

Man's natural rights are absolute, not in the sense 
that they are subject to no limitations — which would 
be absurd — but in the sense that their validity is not 
dependent on the will of anyone except the person 
in whom they inhere. They are absolute in ex- 
istence but not in extent. Within reasonable limits 
their sacredness and binding force can never cease. 
Outside of these limits, they may in certain con- 
tingencies disappear. If they were not absolute to 
this extent, if there were no circumstances in which 
they were secure against all attacks, they would not 
deserve the name of rights. The matter may be 
made somewhat clearer by one or two examples. 
The right to life is said to be absolute because no 
human power may licitly kill an innocent man as a 
mere means to the realization of any end whatever. 
The life of the individual person is so sacred that, 
as long as the right thereto has not been forfeited by 
the perverse conduct of the subject himself, it may 
not be subordinated to the welfare of any other in- 
dividual or any number of individuals. Not even 
to preserve its own existence may the State directly 
and deliberately put an unoffending man to death. 
When, however, the individual is not innocent, when 
by such actions as murder or attempted murder he 
has forfeited his right to live, he may, of course, be 
rightfully executed by civil authority, or killed in 
self-defense by his fellow man. He may also be 
compelled to risk his life on behalf of his country, 
for that is a part of his duty ; and he may with en- 



tire justice be deprived of life indirectly and inci- 
dentally, as when non-combatants are unavoidably 
killed in a city that is besieged in time of war. 
Again, the right to liberty and property are not 
absolute in the sense that the individual may have 
as much of these goods as he pleases and do with 
them as he pleases, but inasmuch as within reason- 
able limits — which are always determined by the 
essential needs of personal development — these 
rights are sacred and inviolable. 

With respect to their natural rights, all men are 
equal, because all are equal in the rational nature 
from which such rights are derived. By nature 
every man is a person, that is, a rational, self-active, 
independent being. Every man is rational because 
endowed with the faculties of reason and will. His 
will impels him to seek the good, the end, of his 
being, and his reason enables him to find and adjust 
means to this end. Every man is self-active, inas- 
much as he is master of his own faculties and able in 
all the essentials of conduct to direct his own actions. 
Every man is independent in the sense that he is 
morally complete in himself, is not a part of any 
other man, nor inferior to any man, either in the 
essential qualities of his being or in the end toward 
which he is morally bound to move. In short, 
every individual is an "end in himself," and has a 
personality of his own to develop through the exer- 
cise of his own faculties. Because of this equality 
in the essentials of personality, men are of equal 
intrinsic worth, have ends to attain that are of equal 
intrinsic importance, and consequently have equal 


natural rights to the means without which these 
ends cannot be achieved. 

Only in the abstract, however, are men's natural 
rights equal. In the concrete they are unequal, 
just as are the concrete natures from which they 
spring. ^ This is not to say that equality of rights 
is an empty abstraction, without any vital meaning 
or force or consequences in actual life. Men are 
equal as regards the number of their natural rights. 
The most important of these are the rights to life, 
to liberty, to property, to a livelihood, to marriage, 
to religious worship, to intellectual and moral edu- 
cation. These inhere in all men without distinction 
of person, but they have not necessarily the same 
extension, or content, in all. Indeed, proportional 
justice requires that individuals endowed with dif- 
ferent powers should possess rights that vary in de- 
gree. For example, the right to a livelihood and 
the right to an education will include a greater 
amount of the means of living and greater oppor- 
tunities of self-improvement in the cases of those 
who have greater needs and greater capacities. But 
in every case the natural rights of the individual 
will embrace a certain minimum of the goods to 
which these rights refer, which minimum is de- 
termined by the reasonable needs of personality. 
The rights that any person will possess in excess of 
this minimum will depend upon a variety of cir- 
cumstances, individual and social. Hence, instead 

* For an explanation of the distinction between abstract or 
specific and concrete or individual equality, see, Taparelli, 
"Droit nature!," nos. 354-363, and Naudet, "La democratie," 
ch. XV. 



of saying that the natural rights of all men are 
equal in the abstract but not in the concrete, it 
would perhaps be more correct, or at least less mis- 
leading, to describe them as equal in kind, number 
and sacredness, and in extension relatively to their 
particular subjects; but not in quantity nor in abso- 
lute content. 

Such in bare outline is the theory of the character, 
purpose, and extent of natural rights. Do they 
really exist? Is the individual really endowed with 
moral prerogatives, inviolable claims, in virtue of 
which it is wrong, for instance, to take from him, 
so long as he is innocent of crime, his life or his 
liberty? Whence comes the validity and sacredness 
of these claims ? The answers to these questions have 
already been briefly indicated in the statement of 
the end for which the claims exist. Natural rights 
are necessary means of right and reasonable living. 
They are essential to the welfare of a human being, 
a person. They exist and are sacred and inviolable 
because the welfare of the person exists — as a fact 
of the ideal order — and is a sacred and inviolable 
thing. It was Cicero who wrote: "Fine in phil- 
osophia constitute, constituta sunt omnia," In 
problems of philosophy, when we have established 
the end we have established all things else. Let us 
look more deeply, then, into the scope and character 
of this end to which natural rights are but means. 

Right and reasonable life, the welfare of the per- 
son, consist in the development of man's personality 
through the harmonious and properly ordered ex- 
ercise of his faculties. He should subordinate his 


sense- faculties to his rational faculties ; exercise his 
rational faculties consistently with the claims of his 
Creator and the reasonable demands of his fellows; 
and seek the goods that minister to the senses and 
the selfish promptings of the spirit in subordination 
to the higher goods, namely, those of the intellect 
and of the disinterested will. In a word, the su- 
preme earthly goal of conduct is to know in the 
highest degree the best that is to be known, and to 
love in the highest degree the best that is to be 
loved. These highest objects of knowledge and 
love are God, and, in proportion to the degrees of 
excellence that they possess, His creatures. To 
prove that these moral and spiritual values are facts, 
we have only to appeal to the consciousness of any 
normally constituted human being. The average 
man has an abiding conviction that the rational 
faculties are higher, nobler, more excellent, of great- 
er intrinsic worth than the sense- faculties ; that 
consequently the goods of the mind are to be pre- 
ferred to those of the senses; and that among the 
activities of the rational powers those dictated by 
disinterested love are intrinsically better than those 
which make for selfishness. These primary and 
general moral intuitions produce in the. mind of the 
person who heeds them the conviction that it is not 
only reasonable but obligatory for him to pursue the 
path of conduct thus dimly outlined. The imme- 
diate objective basis of this obligation is the intrin- 
sic superiority of the higher faculties, the infinite 
worth of God, and the essential sacredness of human 
personality. The ultimate source of the obligation 
4 49 


is the Will of God ; just as the ultimate source of the 
distinction between the higher and lower faculties, 
activities, and goods is the Divine Essence; and 
just as the ultimate source of the intuitions by which 
we perceive these distinctions is the Divine Reason. 

Since, therefore, the individual is obliged to live 
a moral and reasonable life in the manner just 
described, the means to this end, i. e., natural rights, 
are so necessary and so sacred that all other persons 
than the one in whom they reside are morally re- 
strained from interfering with or ignoring them. 
The dignity of personality imposes upon the individ- 
ual the duty of self-perfection ; he cannot fulfil this 
duty adequately unless he is endowed with natural 
rights. Such is the immediate basis of natural rights 
and the proximate source of their sacredness ; their 
ultimate source is to be found in the Reason and 
Will of God, who has decreed that men shall 
pursue self-perfection and that they shall not arbi- 
trarily deprive one another of the means essential 
to this purpose. 

This method of basing the individual's natural 
rights upon his duties is perhaps the one most com- 
monly employed by those writers who hold indi- 
vidual perfection to be the immediate end and rule 
of conduct. According to another mode of reason- 
ing, they rest, not upon the duties of their possessor, 
but upon those duties of other men toward him which 
are called juridical, that is, the "other-regarding" 
duties that cover goods which in the strict sense 
belong to him as his own. Thus the fulfilment of 
lawful contracts is a juridical duty, while assisting 



the needy is only a duty of charity. All juridical 
duties may be summed up in the command, "thou 
shalt not arbitrarily interfere with the external liber- 
ty of thy fellow man," for external liberty comprises 
all those opportunities of activity, acquisition and 
possession that are essential to the pursuit of reason- 
able self-perfection. Corresponding to and implied 
by these juridical duties in one man are those moral 
prerogatives in other men that we call natural rights. 
The foundation and source of these duties is that 
precept of the natural law (understanding by natural 
law that portion of God's eternal law which applies 
to human conduct and is written in the human rea- 
son) which enjoins men to respect the dignity of 
human personality in one another, i 

This line of argument, however, suggests that not 
even the juridical duties of men are formally neces- 
sary as a basis and justification of natural rights. 
These duties are, indeed, imposed upon man by the 
natural law, but the reason why this particular pre- 
cept of the law exists, as well as the reason that con- 
strains us to believe that it does exist, is to be found 
in the intrinsic and inviolable worth of the individ- 
ual. That is the ultimate basis — on this side of God 
— of both juridical duties and natural rights. To 
prove the existence of the latter, it seems, therefore, 
logically sufficient to show that because of his in- 
trinsic dignity a person is morally privileged to pur- 
sue self-perfection, and his fellows are morally 
restrained from hindering his exercise of the priv- 

* Cf. "Philosophia Moralis," by Julius Costa-Rosetti, 2d 
edition, thesis 114. 



ilege. Natural rights may be likened to the legal 
right by which a man holds a piece of land that he 
has bought from the State. His claim thereto is 
founded neither upon his duty to support his family 
(to which end the produce of the land may be as- 
sumed to be the necessary means) nor upon the 
obligation which binds his neighbors to leave him 
in undisturbed possession. Similarly, the indi- 
vidual's natural rights may be regarded as inde- 
pendent both of his own duties and of the duties 
which these rights occasion in his fellows. ^ 

Finally, natural rights can be logically defended 
on the principles of what may be called intuitive 
hedonism. There are men who maintain that the 
supreme end and rule of conduct is universal happi- 
ness. By this phrase they mean, not "the greatest 
happiness of the greatest number," nor the general 
happiness of the group or of society, — all of which 
are equivalent in the concrete to the happiness of the 
majority — but the happiness of each and every hu- 
man being. They insist that, since human happiness 
is the good of a person, it has intrinsic zvorth, is in 
itself a sacred thing, and that all individuals have, 
therefore, essentially equal claims to the opportunity 
of pursuing it. This doctrine is hedonistic, inas- 
much as it makes happiness the ultimate end, and 
intuitive, inasmuch as it postulates not merely the 
desirableness of personal happiness, but the intrinsic 
worth of all human happiness. The late Professor 

^ Cf. "The Theory of Morals," by Paul Janet, Book II, ch, 
IV, in which the author defends a doctrine very similar to the 
one just outlined, although he strangely calls a right a "respon- 



Sidgwick held substantially this view, although 
he admitted that it contains an inherent contradic- 
tion. 1 For if the intuition of "rational benevo- 
lence" be acknowledged as logically sufficient to com- 
pel me to forego my own happiness for the greater 
happiness of others, then the ultimate end, rule and 
determinant of right action is no longer my happi- 
ness — which is the only "desirable consciousness" 
that can have any meaning for me — but conformity 
to the dictates of reason. In other words, reason 
assures me that human happiness is valuable per se, 
while all my aspirations and experiences tell me 
happiness is a good only in so far as it provides 
me with agreeable states of consciousness. If, how- 
ever, the general principle be admitted in spite of 
its inherent weakness, a system of natural rights 
can be logically deduced therefrom. 

All of these methods, therefore, posit as the ulti- 
mate earthly basis of the individual's natural rights 
the inherent sacredness of his personality. This is 
true even of the argument which derives rights from 
the duty of perfecting one's self; for this duty is 
itself founded upon the intrinsic worth of the person, 
specifically of his higher faculties. Hence we find 
that those who reject the doctrine of natural rights, 
and who reason logically, reject likewise the princi- 
ple of the essential and absolute dignity of every 
human being. They either deny that anything in the 
universe possesses intrinsic worth, or assert that 
social welfare is the highest good. To the former 

* See his "Methods of Ethics," Book III, chapters XIII and 
XIV ; and Book IV, concluding chapter, 6th ed. 


class belong the believers in egoistic hedonism ; to the 
latter, the social utilitarians and the Hegelians. 

For those who maintain that the supreme end of 
life and rule of conduct is one's own happiness, 
there can, of course, be no such thing as a right in 
the moral sense of the term. There is no sacred- 
ness, no intrinsic worth, no obligation-compelling 
force in either the concept or the fact of happiness 
unqualified and divorced from all consideration of 
the dignity of personality. The person who refuses 
to seek his own happiness can be condemned as un- 
wise but not as immoral. And if he is not, in any 
true sense of the word, under moral obligation to pro- 
cure happiness for himself, neither is he bound by any 
sort of duty to respect or refrain from hindering the 
happiness of others. As there is no sacredness in 
the end — happiness — and none in the persons pur- 
suing it, so there can be no sacredness in the means — 
those opportunities of activity that we call rights — 
and no obligation to respect them. In such a system 
individual rights have neither logical foundation 
nor intelligible meaning. Again, if personal happi- 
ness be the ultimate aim and criterion of reasonable 
conduct it is altogether fitting and reasonable that 
each man should interpret happiness in his own way, 
and strive to obtain it by whatever means seem to 
him best, regardless of such unreasonable and un- 
founded restraints as rights and obligations. 

This purely egoistic hedonism seems to be com- 
pletely and consistently accepted by only a very small 
minority of the world's thinkers. Even with them 
it is a merely speculative belief. In practice they 



reject or at least modify it, in common with the 
overwhelming majority of the men and women who 
live outside of lunatic asylums. A formal refuta- 
tion of it in the interest of the doctrine of natural 
rights is, therefore, unnecessary. Of much greater 
importance for our contention is the theory that all 
rights are positive, that is, derived from society, and 
conferred upon the individual primarily for the 
benefit of society and only secondarily for the sake 
of the individual. ^ Individual rights are valid in 

* In substance this theory seems to be held by a majority 
of the non-Catholics of our time who write on justice and 
political philosophy. Not all state it in the same language nor 
restrict the concrete rights of the individual to the same extent, 
but all accept the principle that the individual has no right 
which society may not in certain contingencies annul for its 
own welfare. The sources of the theory are chiefly: (i) 
writers who opposed the doctrines of the French Revolution, 
such as, Edmund Burke in "Reflections on the Revolution in 
France," and Joseph de Maistre in "Essai sur le principe 
generateur des constitutions politiques" ; (2) juristic writers 
who, in opposition to the Eigheenth century teaching on 
natural rights, endeavored to place all rights on a basis of 
historical facts and development, the most prominent of whom 
were F. C. de Savigny in "System des roemischen Rechts," 
and F. C. Stahl in "Philosophic des Rechts" ; (3) the Hegelian 
conception of the State as the highest manifestation of the 
Universal Reason and Will, tne source of all rights, and the 
absolute end to which the individual must subordinate his 
particular aims and activity ; see Hegel's "Grundlinien der 
Philosophic des Rechts," and Lasson's "System der Rechts- 
philosophic" ; (4) and finally, the doctrine of evolutionist 
utilitarianism, which emphasizes the importance of race pro- 
gress at the expense of the individual. 

Some indications of common points in the last two sources 
will be found in chapter H of Ritchie's "Darwin and Hegel," 
while recent statements of the general positivistic theory of 
rights are contained in "Natural Rights," by the same author, 
in Hobson's "Social Problem," and in Willoughby's "Spcial 
Justice." Good presentations of the doctrine of natural rights 
defended in this chapter are made by Taparelli, "Droit 
naturel," and Meyer, "Institutiones Juris Naturalis." Finally 
Hegel's general concept of personality is successfully attacked 



so far as they do not hinder the social weal. "By 
himself," says Mackenzie, "a man has no right to 
anything whatever. He is a part of the social whole ; 
and he has a right only to that which it is for the 
good of the whole that he should have." ^ In this 
view the social organism becomes an end in itself; 
and its good becomes the final goal and rule of 
human conduct. Now society is, indeed, something 
more than an abstraction, something more than the 
sum of its component individuals. And its function 
is not simply to guarantee equal liberty to all its 
members, in the sense of Immanuel Kant and Her- 
bert Spencer. It is a real entity, a moral body, an 
organism, whose purpose is to safeguard the rights 
and promote to a reasonable degree the welfare of 
every one of its members. It is an organism only 
by analogy, however ; not literally or physically. It 
is an organism inasmuch as its members are mutu- 
ally dependent, and have diverse functions; inas- 
much as it persists amid continuous changes in its 
membership, and will retain its identity after all its 
present members shall have perished ; and inasmuch 
as its health is determined by the health of its mem- 
bers, and in turn reacts upon the latter. When this 
much has been said the analogy between society and 
a biological organism is about exhausted. Society 
is not an organism in the sense that it is a finality. 
Its members do not exist and function for its wel- 
fare; they possess intrinsic worth and sacredness. 

in Andrew Seth's "Hegelianism and Personality," especially 
on pp. 67-69 and in the concluding chapter. 
^ "A Manual of Ethics," p. 296. 



Hence it is not an organism in which the individual's 
personaHty is merged and lost, like the branch in the 
tree, to use the illustration of Hegel. Society has, 
indeed, rights that are distinct from the rights of 
the individuals composing it, and its scope and aims 
reach beyond the welfare of the men and women that 
live in it at any given time. It has the right, for 
example, to make war, which the individual has not ; 
and to prevent the ruthless destruction of forests, 
which prohibition may be contrary to the interests 
and wishes of its present members. Nevertheless, 
every right that society possesses, every act that it 
performs, every assertion that it makes of its legiti- 
mate power over individuals, is ultimately for the 
sake of individuals. It cannot otherwise be justi- 
fied, for it is not an end in itself. 

Let us concede for the moment that society 
exists for its own sake, is its own highest good. All 
its powers, prerogatives and activities will be natur- 
ally used as a means to this end. Whenever individ- 
uals, however innocent of wrong doing, impede 
society's progress they are to be relentlessly blotted 
out of existence. Let us suppose that as a result of 
this social selection the general level of the race is 
much higher than it would have been had regard 
been paid to the "superstition" of natural rights. 
Society has been treated as an end in itself, and the 
result is a more excellent society. 

It must be evident that the individuals who have 
been removed to bring about this result could not 
reasonably have been expected to make the sacri- 
fice willingly. They could not have been satisfied 



to efface themselves for the sake of society as dis- 
tinct from its members, since this would be to die 
for an abstraction. Nor is it likely that any con- 
siderable number of them were willing to forego 
existence in order that the individuals who were left 
behind might enjoy a more complete existence in 
the improved society; for the real meaning of this 
situation is that the former have been used as mere 
instruments to the welfare of the latter. It is not 
reasonable to expect men to devote themselves com- 
pletely to any other end than their own highest 
good, and a superior society cannot be the highest 
good for those who must be annihilated as a condi- 
tion of its realization. They will very naturally pre- 
fer to run the risk of securing their own welfare in 
a less perfect social organization. There is no duty 
constraining one section of the community — not 
simply to risk their lives, as in a just war — but to 
submit to be killed by the social authority, in order 
that the surviving citizens may have the benefit of a 
more efficient State. The same statement may be 
made concerning any other of the individual's 
natural and essential rights. And if the individuals 
whose rights are treated as non-existent are neither 
willing nor bound by moral obligation to make the 
sacrifice, the State has certainly no right, no moral 
power, to treat them as a means pure and simple to 
the welfare of those of its members who are per- 
mitted to survive. For, juggle as we will with the 
terms "social utility" and "social welfare," talk as 
obscurely as we may about regarding the individual 
from the viewpoint of society, the true meaning of 



the assertion that the rights of the individual are 
derived from and wholly subordinate to society, is 
that the lives of those who are less useful to society 
are essentially inferior to the lives of those who are 
more useful. And not until those who reject natur- 
al rights have succeeded in proving that some human 
lives are less sacred, have less intrinsic worth, stand 
on a lower grade of being than others, can they in- 
dulge the hope of winning over any considerable 
number of thinkers to the contention that the in- 
dividual — even the poorest and lowliest person that 
breathes — has no rights that are indestructible by 

The positivist theory of rights becomes more 
formidable, at least at first sight, when it is stated 
in terms of Hegelianism, The question is no longer 
one between the relative interests and importance of 
the stronger, wiser and more virtuous citizens on 
the one hand, and of the weaker, less intelligent and 
more vicious on the other. Organized society, or 
the State, is in this system regarded as a good in 
itself, the highest manifestation of the Universal 
Reason, which is the only final reality. The all- 
important consideration, then, is to see that this 
highest embodiment of the Universal Reason or 
World-Spirit called the State, shall reach the fullest 
possible development. Compared with this purpose, 
the welfare of individuals, who are merely particular 
and imperfect realizations of the one great reality, 
is insignificant. Their importance is analogous to 
that of the individual trees in a beautiful grove : the 
totality called the grove is the supreme end, to which 



the existence and condition of any particular tree is 
entirely subordinate. The rights of the individual 
are, therefore, derived from the State and intended 
for the greater glory of the State. The late Profes- 
sor Ritchie, one of the ablest of the Hegelians who 
wrote in English, describes the rights and dignity 
of the human person thus : "Every human being may 
claim a right to be considered as such, because he 
potentially shares in the consciousness of the Uni- 
versal Reason."! Each individual is, as it were, a re- 
ceptacle of the Universal Reason, and derives there- 
from all his worth and sacredness. When, conse- 
quently, the life or liberty of the individual begins 
to be an obstacle to the activity or unfolding of the 
Universal Reason, whenever the interests of the 
Universal Reason demand that any given individual 
should cease to embody it, he may lawfully be put to 
death, just as a diseased limb may be severed from 
the body, or a leaking pot be consigned to the scrap 
heap. If the Pantheistic basis of this deification of 
the State be accepted the theory of rights reared 
upon it is entirely logical. It may well be doubted, 
however, whether this blind, impersonal entity known 
as the Universal Reason seems to any considerable 
number of persons to have the moral authority re- 
quisite to oblige them to surrender their particular 
existence for Its aggrandizement. And of the few 
who may recognize the supreme rights of the Uni- 
versal Reason, not all will acknowledge that Its 
loftiest manifestation is to be found in the very falli- 
ble and very imperfect State in which they happen 

* "Natural Rights," pp. 96, 97. 


to live. An attempt to refute the metaph3'sical as- 
sumptions underlying the Hegelian theory of rights 
is, consequently, not much needed at this time. 

One of the most frequent of the popular arguments 
against natural rights runs thus : All rights come in- 
to existence, become necessary, and obtain adequate 
protection only in society; hence they are derived 
from society, exist for a social end, and should be 
exercised chiefly for the social welfare. This pre- 
sentation is vitiated by an incorrect analysis and by 
unwarranted inferences. Not all of man's rights 
require a social organization, or even social contact 
of any kind, in order that they should become 
existent. All that is necessary is that two men be 
alive at the same time. They may be thousands of 
miles apart, may not even know of each other's ex- 
istence, yet each will possess in full validity such 
natural rights as those of life, liberty and property, 
and will be morally restrained from hindering his 
fellow in the reasonable exercise of these rights. 
As to the second contention, it is true that rights are 
not needed until men come into some form of social 
intercourse; for a right means the moral power of 
restraining others from interfering with one's per- 
sonal goods, and if there is no one near enough to 
interfere the moral restraint is unnecessary and im- 
practicable ; but this does not prove that rights are 
created by society, any more than the fact that even- 
ing dress is worn only at certain "functions" proves 
that this form of apparel is created by or for the 
"functions." The clothes are intended for the in- 
dividual wearers on certain occasions. In like man- 



ner, the individual's rights have for their primary 
purpose his own welfare in society. Finally, the 
fact that a man's rights can be sufficiently protected 
only in civil society is not a reason why they should 
be entirely subordinated to the ends of society, any 
more than the employer's dependence upon his em- 
ployees puts him under obligation to turn over to 
them all his profits. 

Academic opposition to the doctrine of natural 
rights is directed not so much against the moderate 
conception of them that has always prevailed in 
Catholic ethical teaching, as against the exaggerated 
and anti-social form in which they were proclaimed 
by the political philosophers of France, and even by 
some of those of England and America, in the latter 
half of the Eighteenth century. The Catholic view, 
which is the one defended in this chapter, is, as al- 
ready noted, that the individual's natural rights are 
derived from and determined by his nature, that is 
to say, his essential constitution, relations and end. 
They are also said to proceed from the natural law, 
which is simply that portion of God's eternal law 
that applies to actions of human beings. The natur- 
al law is so expressed in man's nature that its general 
precepts may readily be known, partly by intuition 
and partly by analyzing man's faculties, tendencies 
and destiny. In the view of the Revolutionary 
philosophers, however, "nature" and "natural" re- 
ferred not to what is essential and permanent in 
man, but to that which is primitive and unconven- 
tional. Hence they laid more stress on the "state 



of nature" than on the "law of nature." ^ The 
natural law was merely that very simple and very 
primitive system of rules that would suffice for the 
state of nature, in which political restraints would 
be unknown, or at least reduced to a minimum. As 
the late Professor Ritchie has well said: "To the 
Thomist- the law of nature is an ideal for human 
law ; to the Rousseauist it is an ideal to be reached by 
getting rid of human law altogether." ^ In the mind 
of the Revolutionist, therefore, to re-establish the law 
of nature meant to shake off the cumbersome and ob- 
structive political regulations of the day, and get 
back to the simple state of nature, the semi-anarchic- 
al conditions of primitive times. This was, of 
course, a very inadequate interpretation of man's 
nature and of the natural law. No such "state of 
nature" ever existed or ever could exist compatibly 
with civilization. No valid conclusion regarding the 
individual's liberties, duties or rights could be de- 
duced from his position and relations in this imagin- 
ary and irrational existence. Nevertheless, upon it 
were based and by it were measured men's natural 
rights in the Revolutionary system. As a conse- 
quence, the rights of the individual were exaggerated 
and the rights of society minimized. In practice 
this juristic liberalism has meant, and always will 
mean, that the State allows to the strong the legal 
right and power to oppress the weak. A good ex- 
ample of the evil is to be found in the results of the 
economic policy of laisses-faire. It is no wonder 

^ Cf. Bonar, "Philosophy and Political Economy," p. i86. 

* And the Catholic philosopher generally. 

* "Natural Rights," p. 43. 



that there has been a reaction against this pernicious, 
anti-social and really unnatural theory of natural 

The doctrine of natural rights outlined in the fore- 
going pages holds, then, a middle ground between 
the Revolutionary and the positivistic theories of 
the origin and extent of the rights of the individual. 
It insists that the individual is endowed by nature, 
or rather, by God, with the rights that are requisite 
to a reasonable development of his personality, and 
that these rights are, within due limits, sacred against 
the power even of the State ; but it insists that no in- 
dividual's rights extend so far as to prevent the State 
from adjusting the conflicting claims of individuals 
and safeguarding the just welfare of all its citizens.. 
In other words, man's natural rights must not be sc 
wideiy interpreted that the strong, and the cunning, 
and the unscrupulous will be able, under the pretext 
of individual liberty, to exploit and overreach the 
weak, and simple, and honest majority. The formula 
that correctly describes the limits of individual 
rights is not the one enounced by Kant and Fichte, 
namely, that a person has a right to do everything 
that does not interfere with the equal liberty of oth- 
ers. ^ Interpreted in one way, this formula is 
utterly incapable of application, since the doing of 
an action by one man means the limitation to that 
degree of the liberty of all other men. Understood 
in a completely subjective sense, it would justify 
and legalize theft, adultery and murder; for I may 

^ Seft Kant's "Metaphysik der Sitten," section C, and 
Fichte's "Science of Rights," p. i6i, Kroeger's translation. 



claim the right to steal if I am willing that others 
should enjoy the same liberty. The true formula 
is, that the individual has a right to all things that 
are essential to the reasonable development of his 
personality, consistently with the rights of others 
and the complete observance of the moral law. 
Where this rule is enforced the rights of all indi- 
viduals, and of society as well, are amply and reason- 
ably protected. On the other hand, if the indi- 
vidual's rights are given a narrower interpretation, 
if on any plea of public welfare they are treated by 
the State as non-existent, there is an end to the dig- 
nity of personality and the sacredness of human 
life. Man becomes merely an instrument of the 
State's aggrandizement, instead of the final end of 
its solicitude and the justification of its existence. 
If all rights are derived from the State, and deter- 
mined by the needs of the State, the laborer has no 
such thing as a natural right to a Living Wage, nor 
any kind of right to any measure of wages, except 
in so far as the community would thereby be benefit- 
ed. President Hadley tells us that some workers 
are more profitable at a low wage than at a high 
one, that the "economy of high wages" is not a 
universal law. "There are some men whose maxi- 
mum efficiency per unit of food is obtained with 
small consumption and small output. These go into 
lines requiring neither exceptional strength nor ex- 
ceptional skill, and remain poor because the best 
commercial economy in such lines is obtained by a 
combination of low output and low consumption." ^ 

^"Economics," section 363. 
5 65 


Those who would measure the rights of the individ- 
ual by the social weal must logically conclude that 
whenever "the best commercial economy" is secured 
by "low consumption," in other words, by low wages, 
the underpaid worker, let him be never so cruelly 
"sweated," is not treated unjustly and has no right 
to a larger remuneration. Hence the importance 
of the doctrine of rights to the subject of this vol- 
ume ; for it cannot be shown that every laborer has 
an ethical claim to a Living Wage unless the teach- 
ing of Christianity be accepted, to-wit : "That every 
individual by virtue of his eternal destination is at 
the core somewhat holy and indestructible ; that the 
smallest part has a value of its own, and not merely 
because it is part of a whole : that every man is to be 
regarded by the community, never as a mere instru- 
ment, but also as an end." ^ 

* Gierke, "Political Theories of the Middle Age," p. 82. 



The Right to Subsistence and the Right to a 
Decent Livelihood 

The right to a Living Wage is derived from the right 
to live from the bounty of the earth. The latter right ac- 
knowledged by most nations and insisted upon by Christi- 
anity. It is evident from a view of man's nature and his 
relation to the earth. It is superior to and limits the right 
of private ownership. Meaning of a decent livelihood. Its 
rational basis is the sacredness of personality. Men have 
not natural rights to equal amounts of goods ; for they are 
unequal both in individual needs and productive powers. 
Nor rights to equal satisfaction of the totality of their 
needs. Circumstances by which the right to a decent liveli- 
hood is conditioned. 

According to the argument made in the last chap- 
ter, the source of natural rights is the dignity of the 
human person, while their scope is determined by 
the person's essential needs. A man's natural rights 
are as many and as extensive as are the liberties, 
opportunities and possessions that are required for 
the reasonable maintenance and development of his 
personality. They may all be reduced to the right 
to a reasonable amount of external liberty of action. 
Some of them, for instance, the rij^ht to live and the 
right to marry, are original and primary, mhering 



in all persons of whatever condition ; others are de- 
rived and secondary, occasioned and determined by 
the particular circumstances of particular persons. 
To the latter class belongs the right to a Living 
Wage. It is not an original and universal right; 
for the receiving of wages supposes that form of in- 
dustrial organization known as the wage system, 
which has not always existed and is not essential to 
human welfare. Even to-day there are millions of 
men who get their living otherwise than by wages, 
and who, therefore, have no juridical title to wages 
of any kind or amount. The right to a Living Wage 
is evidently a derived right which is measured and 
determined by existing social and industrial institu- 

The primary natural right from which the right 
to a Living Wage is deduced, is the right to subsist 
upon the bounty of the earth. All people have given 
more or less definite adhesion to the truth that the 
earth is the common heritage of all the children of 
men. Emil de Laveleye and Sir Henry Maine tell 
us that, "originally the soil belonged in common to 
communities of kinsmen"; and Clifife-Leslie, speak- 
ing of the wild herbs, fruits, berries and roots which 
were the earliest forms of property, says : "Individ- 
uals did not regard these as their own absolute 
property, but as part of the common fund of the 
community." ^ Whatever objections may lie in the 
way of the theory of primitive communism in land, 
the facts at our disposal seem to indicate that 

' Introduction to Laveleye's "Primitive Property," pp. vi, 
vii. Cf. Wallace's " Russia." 



scarcely any community has regarded as thieves 
those of its own members who seized their neighbor's 
goods as a last resource against starvation. This 
is especially true of the nations that have adopted 
the moral teachings of Christianity. In the early 
centuries of the Christian era the task of providing 
for the poor and needy was accepted and recognized 
by the bishops and secular clergy, the monasteries 
and other religious institutions, as an obligation of 
legal justice; in modern times it is most frequently 
discharged through the legislation known as poor 
laws. Underlying these various practices and in- 
stitutions is the Christian conviction that every hu- 
man being has not only a claim in charity, but a 
strict right to as much of the wealth of the com- 
munity as is necessary to maintain his life. Such 
was the doctrine of the early Fathers of the Church, 
and such has been the doctrine of all her authorita- 
tive teachers down to the present hour. The teach- 
ing of Basil in the East and Ambrose in the West 
may be taken as representing the mind of all the 
Fathers. The former tells the rich man that the 
superfluous bread, shoes and clothes in his posses- 
sion belong to his hungry and naked neighbors, 
while the latter declares that the man of wealth who 
gives to the poor is not bestowing an alms but pay- 
ing a debt. ^ The greatest of the theologians, St. 
Thomas Aquinas, maintained that the man in ex- 
treme need who had no other resource was justified 
in supplying his necessities from the goods of his 
^ For a fairly good account of the attitude of the Fathers 
toward private property, see Capart, "La propriete individuelle 
et le collectivisme." 



neighbor, and that this would not, properly speaking, 
be theft. ^ Again, he says it is well that property 
should be owned privately, but that the use of it 
should be common, so that all persons may be sus- 
tained out of its abundance. ^ In this statement we 
have undoubtedly an echo and development of the 
saying of Aristotle that, "it is best to make property 
private but to have the use of it common." ^ 

This claim of the individual to a livelihood, which 
seems to be allowed by the moral convictions of all 
peoples, and which is explicitly asserted in the 
Christian teaching, is obviously in accord with the 
dictates of reason. Since all persons are of equal 
intrinsic worth, the maintenance of life is of equal 
intrinsic importance in all. Relatively to his fellows, 
every man is an end in himself. No man can rea- 
sonably say to his neighbors : "My life is superior to 
yours, more sacred than yours, and your faculties 
and lives ought to be treated as mere means to my 
welfare." Nor can any man truthfully assert that 
there is anything in the designs of God, in his own 
nature, or in the nature of the earth that would jus- 
tify him in maintaining that his right to the earth's 
material resources is superior to that of his fellows. 
On the one hand, then, we have the fact that all per- 
sons are of equal dignity and their lives of equal 
intrinsic importance ; on the other hand, we see that 
all men stand on the same footing in relation to the 
common bounty of earth. It follows, therefore, 
that the right of access to the material means of liv- 

*"Summa Theologica," 2a. 2ae., q. 66, a. 7. 

'Ibid, a. 2. 

•"Politics," Book II, ch. V. 



ing is as important and as valid in one man as in 
another. The man who is not in himself in extreme 
need cannot rightfully debar his perishing fellow 
man from the goods that are indispensable to the 
preservation of life. 

What becomes, according to this doctrine, of the 
right of private property, and of the recognized 
titles thereto, such as occupation, inheritance, labor, 
acquisition by contract, etc. ? Suppose the starving 
man wishes to take some of the bread that the honest 
mechanic has bought with his hard earned wages ! 
The latter may meet the man in distress with the 
statement : "Yes, I concede that you have by nature, 
by the fact that you are a human being, the right to 
acquire and use property and, in general, to live 
upon the fruits of the earth ; but my purchase has 
given me a particular claim to this particular bread, 
a specific and precise right against which your 
generic and vague right cannot prevail." The 
answer to this contention is simple. All the titles 
of private ownership are merely reasons or causes 
why a person can validly lay claim to a particular 
piece or article of private property. They show 
why the good in question belongs to the present 
claimant rather than to any other owner; but they do 
not prove the validity of private property as an in- 
stitution. Private ownership of the earth's resources 
is right and reasonable not for its own sake — which 
would be absurd — but because it enables men to sup- 
ply their wants more satisfactorily than would be 
possible in a regime of common property. Hu- 
man needs constitute the primary title both of com- 



mon and of private ownership. Private property 
is morally legitimate because it is the method that 
best enables man to realize his natural right to use 
the gifts of material nature for the development of 
his personality. It is, therefore, merely a means, 
and its scope is determined and limited by the end 
which it promotes, and which is its sole justification. 
The private right of any and every individual must 
be interpreted consistently with the common rights 
of all. When a private owner encroaches upon the 
latter he cannot justify his conduct by an appeal to 
the authority of his private right ; for this is a mere 
means to the right of use, and his right of use ceases 
where the like right of his neighbor begins. Hence 
a man's right to a superfluous loaf which is his by 
a title of private ownership does not absolve him 
from the crime of injustice when he withholds it 
from his starving fellow man. In acting thus he 
treats a trifling want of his own, namely, the desire 
to continue in possession of that loaf, as a thing of 
greater worth than his neighbor's life. He uses the 
common bounty of nature to satisfy an unimportant 
want at the expense of an essential want in a being 
whose life is as sacred and as valuable as his own. 
As this use of goods is unreasonable, so is the means 
by which it is accomplished, namely, an undue ex- 
tension and unwarranted interpretation of the right 
of private property. 

So much for the right to subsistence, to a bare 
livelihood. By a decent livelihood is meant that 
amount of the necessities and comforts of life that is 
in keeping with the dignity of a human being. It 



has no precise relation to the conventional stand- 
ard of living that may prevail w^ithin any social or 
industrial class, but describes rather that minimum 
of conditions which the average person of a given 
age or sex must enjoy in order to live as a human 
being should live. It means, in short, that smallest 
amount of subsistence goods which is reasonable, 
becoming, appropriate to the dignity of a person. 
The content of this right will be stated in detail here- 
after ■; at present let us say that if a man is to live a 
becoming life he must have the means, not merely 
to secure himself against death by starvation and 
exposure, but to maintain himself in a reasonable 
degree of comfort. He is to live as a man, not as 
an animal. He must have food, clothing and shelt- 
er. He must have opportunity to develop within 
reasonable limits all his faculties, physical, intellec- 
tual, moral and spiritual. The rational ground of 
this right is the same as that of the right to subsist- 
ence. It is the dignity and essential needs of the 
person. Those means and opportunities that have 
just been described as a decent livelihood are the 
minimum conditions of right and reasonable living, 
since without them man cannot attain to that ex- 
ercise of his faculties and that development of his 
personality that makes his life worthy of a human 
being. When he is compelled to live on less than 
this minimum he is treated as somewhat less than a 
man. If it be asked. What proof can be given that a 
person really possesses this right to a decent liveli- 
hood? the answer must be that proof in the strict 
sense is impossible. If it is not self-evident, none 



of man's natural rights are self-evident, and the 
dignity of personality is a delusion. All that a de- 
fender of any of these rights can do is to offer what 
Mill called ''considerations which induce the mind 
to accept." The only argument that can be adduced 
for the right to live is that the sacredness of person- 
ality is violated when one man uses the life of an- 
other as a mere means to his own welfare. Simi- 
larly a man's dignity is outraged when he is deprived 
of the opportunity to live a reasonable life, in order 
that some other man or men may enjoy the super- 
fluities of life. A decent livelihood is just as truly 
an essential need of man, is just as absolutely de- 
manded by his intrinsic dignity, as subsistence, or 
security of life and limb. In all these rights the 
vital and ultimate consideration is the intrinsic worth 
of the person. If this be ignored, if the principle 
that every man is an end in himself be rejected in 
the case of the claim to a decent livelihood, it can 
logically be ignored where life itself is at stake ; for 
the difference between these rights and between the 
needs to which they respond is one of degree not of 
kind. Now, since a reasonable life and the reason- 
able development of personality are of equal intrinsic 
importance in all human beings, the fruits of the 
earth, the common heritage, ought to be distributed 
in such a way that this end will be realized. Conse- 
quently when any person is hindered from obtaining 
access on reasonable terms to this minimum of ma- 
terial goods his dignity and rights are violated, and 
some other man or men, or some social institution, 
has committed an act of injustice. 



Why content ourselves, it may be asked, with the 
assertion that men have equal rights merely to a 
decent livelihood? Since the earth was created for 
all, and since men are equal in personal dignity, 
have they not a natural right to equal amounts of the 
products of the earth? The first answer to these 
questions consists in an appeal to that very consider- 
ation of equal justice which, superficially regarded, 
seems to demand an equal division. Although men 
are equal in personal dignity, they are unequal in 
their individual powers and needs. Equal generic- 
ally, they are unequal individually. The quantity 
that would constitute a decent livelihood, or any 
other given level of living, for one man, would mean 
now more and now less than this level in the case of 
other men. So that even if the ideal of distributive 
justice were that social condition in which all men 
would have the requisites of precisely equal degrees 
of life and development, the quantity necessary for 
this purpose would vary according to the varying 
constitutions and peculiarities of the individuals. 
All that any man could justly demand would be the 
amount that made this degree of life possible for 
him. With regard to their content, therefore, the 
equality of rights is proportional not arithmetical. 

Another objection to the method of absolute equal- 
ity in distribution arises out of the principle of pro- 
ductivity. The conviction is well-nigh universal 
that a man has a right to all that he produces. Any 
one not in extreme need who seizes the results of 
another's labor is everywhere regarded as a robber 
or a thief. And this judgment seems to be entirely 



correct. Certainly it is true of those cases in which 
the producer, using materials which are his by some 
valid title of ownership, turns out a product unassist- 
ed. Upon this product his, and only his, personality 
is impressed, and it is difficult to see on what ground, 
save that of dire need, any portion of it can be 
claimed by anyone else. The same principle would 
seem to hold in a lesser degree with regard to the 
joint product of a number of associated workers 
whose productive contributions have been unequal. 
Those who have produced most are, it would seem, 
entitled to the largest share of the product. It is not 
necessary, nor even proper, that they should be 
awarded in full proportion to their productivity — for 
the reasonable needs and the efforts or sacrifices of 
the other workers constitute superior titles — but they 
ought to receive something more than the less effi- 
cient contributors. Mr. John A. Hobson says that so- 
ciety must, as a matter of expediency, recognize in its 
members some kind of right to "all that portion of a 
product necessary to evoke the effort to produce it."^ 
It is true that society will do well to pay exceptional 
rewards in order to obtain exceptional services, but 
this necessity under which society labors does not of 
itself confer upon the doers of such services a right 
to unusual remuneration, any more than the condi- 
tions which compel a weaker nation to pay tribute 
to a stronger create a right in the latter to receive 
and retain such payments. Social expediency is 
frequently nothing more than forced toleration of 
something essentially evil. Independently, how- 
^The Social Problem, pp. 105, 106. 


ever, of the attitude of society, superior productive 
power does seem to give rise to some sort of title to 
superior rewards, and therefore to refute the claims 
of arithmetical equality. 

But if man's needs constitute the primary and most 
urgent title of ownership, and should be taken as 
the sole rule of distribution up to the point where 
all men are provided with a decent livelihood, why 
not apply the same principle to all the needs that 
clamor for satisfaction and all the goods that are to 
be distributed? Since men are of equal worth, does 
not ideal justice require that they should be enabled 
to supply the totality of their needs in equal degrees ? 
Is it just that one man smoke cigars, while his 
neighbor, with the same human nature and the 
same tastes, is compelled to content himself with 
cheap tobacco and a clay pipe ? One answer to these 
questions is found in the claims of the principle of 
productivity as outlined in the preceding paragraph. 
The man who produces more wealth or other forms 
of social utility than his fellow producers acquires 
some kind of right to a greater reward, independ- 
ently of the extent or intensity of his needs. Again, 
some of the producers make greater efforts and 
greater sacrifices than others ; and a large part of 
the world's productive resources is already held by 
legitimate titles of private ownership, such as oc- 
cupation, inheritance and contract. Superior sac- 
rifices undergone in the production of social utilities 
create a claim to superior remuneration; and the 
recognized titles of private ownership, when not ex- 
tended beyond reasonable limits, are valid because 



they are in accordance with deep and universal 
human needs. They confer upon their holders some 
right to the fruits of the productive goods thus 
owned. Finally, the needs that remain after a decent 
livelihood has been obtained by all, ought, as a matter 
of social zvelfare and of concrete justice, to be satis- 
fied unequally, inasmuch as men who can make a 
good use of the non-essential goods ought to obtain 
more of them than men who are incapable of any so- 
cially useful work. All of these considerations of pro- 
ductivity, sacrifice, existing private property, and 
capacity for public service, modify the claims of the 
principle of needs, and have to be taken into account 
in formulating a completely just system of distribu- 
tion. 1 

It does not follow, however, that the man who 
has no private productive property, and whose 
efficiency and sacrifices in production are only ordi- 
nary, will never have a right to more than the 
minimum that constitutes a decent livelihood. If 
this were true the just wage and the Living Wage 
would mean the same thing for the great majority, 
and only the few would have a right to the means of 
progressing beyond the bare essentials of a reason- 
able existence. But to set forth the requirements 
of full and exact justice in the distribution of goods 
is happily not the object of this book. It is con- 
cerned only with the minimum that will satisfy the 
claims of right; hence the present contention is 
merely that a person has a right to at least a decent 

^A very interesting and penetrating discussion of the dif- 
ferent canons of distribution is found in Willoughby's "Social 
Justice," pp. 107-215. 



livelihood. It has been said above that this is a 
right of access to the appropriate goods "on reason- 
able terms." This phrase suggests the limitations 
of the right. It is not of such a pressing nature as 
the right to subsistence, and therefore does not justi- 
fy the taking of private property, even when there 
is no other available means of securing its realiza- 
tion. It is, moreover, limited by the actual condi- 
tions of production and distribution. Subsistence 
goods are not as a rule provided by nature in the 
precise forms suitable to human use. The raw ma- 
terial of living is present in abundance, but the fin- 
ished consumption goods must be furnished by 
labor. They cannot be obtained by a simple stretch- 
ing forth of one's hand. "In the sweat of thy face 
thou shalt eat thy bread," is the great law of life 
which in some form is binding upon all. It must be 
obeyed, up to the limit of reasonable exertion, by all 
who would make good their claims to a decent live- 
lihood. As all should be enabled to realize the right, 
so all should fulfil the conditions upon which it de- 
pends. On the other hand, the concrete existence 
of the right in all supposes that the total amount of 
goods to be distributed is sufficiently large to afford 
a decent livelihood for all. Where both of these 
conditions are realized the individual's right will be 
valid in general against the society of which he forms 
a part; for, to quote the words of Prince Liechten- 
stein of Austria: "Labor is not merely a matter of 
the private order ; it is a kind of function delegated 
by society to each member of the body politic. The 
peasant who cultivates his field, the artisan who 



works in a manufactory, are, so far as society is 
concerned, functionaries, just as much as the govern- 
ment clerk in his office, or the soldier on the field of 
battle. Industrial labor creates, like every other 
function, a series of reciprocal obligations between 
the society which provfdes it and the worker who 
executes it." ^ The right holds in particular against 
the person or the industrial or social institution to 
whom society has transferred the function of dis- 
tribution, and on whom the actual relations of men 
and the practical harmonizing and just interpretation 
of the natural rights of all, dictate that the obliga- 
tion should rest. 

* Quoted in Lilly's "First Principles in Politics," pp. loi, 



The Right to an Individual Living Wage 

Various ways of defending the Living Wage principle. 
The maintenance of industrial efficiency : theory not fully 
convincing, and it ignores the laborer's personal dignity. 
The theory of an equivalent for expended energy is inconclu- 
sive. The principle of just price demands equality of gain 
for the two exchangers, and a corresponding formulation of 
values and prices. In the opinion of the Schoolmen, thi^ 
was best accomplished through the medium of the social 
estimate. Upon this doctrine of just price some writers 
try to base the right to a Living Wage. Criticism of the 
doctrine in its theoretical and practical aspects, and con- 
clusion it cannot serve as a foundation for this right. 
Some remarks on the general validity of the doctrine of 
just price. The theory that the laborer's right to a Living 
Wage is merely the concrete form of his right to a decent 
livelihood. The former right holds against the members 
of the community in which the laborer lives, notwithstand- 
ing the complexity of modern industry and current ex- 
aggeration of the right of private ownership. A truer 
view prevailed in medieval society; and occasionally finds 
expression to-day. The wage-rights of women and 

It is the purpose of this chapter to show that the 
workingman's right to a decent livelihood is, in the 
present economic and political organization of 
society, the right to a Living Wage. The term 

6 8i 


"workingman" is taken to describe the adult male of 
average physical ability who is dependent exclusively 
upon the remuneration that he is paid in return for 
his labor. And "an individual Living Wage" means 
that amount of remuneration that is sufficient to 
maintain decently the laborer himself, without refer- 
ence to his family. At the close of the chapter a 
word will be said concerning the wage-rights of 
women and children. 

The advocates of the Living" Wage doctrine do 
not all reach their common conclusion by the same 
process of reasoning. Some of them base it on the 
social benefit to be derived from maintaining the 
workers in a condition of the highest industrial 
efficiency; others, on the manifest justice of giving 
a man sufficient to repair the energy that he expends 
in his labor; others, on the "common estimate" of 
what constitutes a just price for work; and still oth- 
ers, on the personal dignity of the laborer, or his 
right to possess the requisites of a decent human 

Prominent among those who defend the principle 
of a minimum wage on social grounds are Sidney 
and Beatrice Webb, and their line of argument is 
typical of that large class of writers who habitually 
regard the rights and welfare of the individual from 
the viewpoint of society. ^ They maintain that the 
State ought to enforce a national minimum of wages 
which would provide the laborer with "the food, 
clothing and shelter physiologically necessary, ac- 
cording to national habit and custom, to prevent 

* See "Industrial Democracy" ist edition, pp. 766-784. 


bodily deterioration." By this means the community 
would rid itself of the industrial evil called "parasit- 
ism," that is, the existence of trades or businesses 
in which the wages paid are too low to maintain the 
workers in industrial efficiency, and to enable them 
to reproduce and rear a sufficient number to take 
their places. These industries take from the nation's 
capital stock of character, intelligence and energy 
more than they give back, and therefore steadily de- 
grade the character and industrial efficiency of the 
whole people. Hence, as a matter of simple pro- 
tection to the national life, both present and future, 
this practice ought to be prohibited, and all workers 
ought to be given, through appropriate legal meas- 
ures, sufficient remuneration to maintain their pro- 
ductive power. 

Admitting the premises, this conclusion is obvious- 
ly correct, but it is only partially satisfactory to any- 
one who regards the laborer primarily as a being 
endowed with a personality and rights of his own. 
Like every other person, he exists primarily for him- 
self, not for society ; and he has rights that are de- 
rived from his own essential and intrinsic worth, 
and whose prim.ary end is his own welfare. Society 
exists for the individual, not the individual for 
society, and when there is question of fundamental 
rights and interests the good of the individual, that 
is, of all the individuals, should be the supreme con- 
sideration. Social welfare when taken as an ideal 
of effort entirely apart from the welfare of the par- 
ticular individuals of whom society is composed, is 
either an empty abstraction or, concretely, the wel- 



fare of a portion only of its members — the strongest, 
or most efficient, or most intelligent. Individual 
rights ought, indeed, to be interpreted consistently 
with the legitimate interests of society, but this is 
only another way of saying that no person's rights 
should be extended so far as to violate the rights of 
other persons; for the vital fact about injury to 
society is always that some wrong is done to a group 
of human beings. And, despite the alleged evils of 
"parasitism," it is quite conceivable that in some 
contingencies social utility would be promoted by 
paying some of the least efficient workers a wage in- 
sufficient to repair expended energy or to bring out 
their highest productive effort. The nation, like 
the individual employer, might find it profitable to 
wear out quickly a portion of its productive power. 
The difference between the product of some laborers 
at bare subsistence wages and at a wage adequate to 
replace their outlay of energy and evoke their fullest 
productivity, might not equal the difference in re- 
muneration. In such cases the attempt to obtain 
the highest industrial efficiency would be economic- 
ally unprofitable. No doubt the advocates of the 
view here criticized are too humane to conclude that 
society is justified in seeking its own utility at the 
cost of inhumanity to any section of its members. 
They would probably insist that this course would 
in the long run be productive of more harm than 
good, owing to the resulting moral deterioration. 
With this contention the defender of natural rights 
would agree, since he holds that true and permanent 
social utility, economic, moral and spiritual, can be 



secured only by a general observance of the mora\ 
law and the law of rights as deduced from the 
essential nature of man ; but he would insist that the 
doctrine which derives the laborer's claim to a decent 
livelihood from considerations of social utility is not 
only unsound in theory but extremely dangerous in 
practice. Once this view becomes general, the con- 
dition of the "sweated classes" will be even more 
hopeless than it is to-day ; for only the few are cap- 
able of perceiving, or anxious to secure, what will 
be beneficial to society "in the long run." The 
many will see only the apparent social utility of cheap 
goods and cheap services. 

The Rev. Charles Antoine, S. J., declares that 
there ought to be an objective equivalence between 
the labor performed and the wage received. ^ That 
is to say, the laborer's remuneration must be suffi- 
cient to replace the energy that he has put forth in the 
service of his employer, and this as a matter not of 
social welfare but of individual rights. While this 
formula has a certain show of exact, rigorous justice, 
it can be interpreted and applied in such a way that 
the "equivalent" compensation will be less than a 
Living Wage. For the energy expended by the 
laborer is replaced, substantially, as long as he con- 
tinues to work with his accustomed efficiency. Any 
wage that is uniform from day to day will provide 
him with the material means of realizing this end. 
The fact is that the amount of energy expended by 
the laborer who is wholly dependent upon his wages, 
is always limited by his wages, can never be in excess 

^"Cours d'economie sociale," p. 6oi. 


of them. The subsistence received by the men and 
women employed in sweat shops does not repair a 
large amount of energy, but, on the hypothesis that 
they continue at work, it replaces all that they actu- 
ally expend. The rule that Father Antoine proposes 
cannot be made the basis of a change for the better, 
since it is even now in force throughout the world 
of industry. In fact, it would work very well side 
by side with "the iron law of wages." 

Other writers derive the right to a Living Wage 
from the principle of just price. Following the 
Schoolmen, they maintain that for every com- 
modity, whether goods or labor, that men buy and 
sell, there is a price that is just and fair. ^ It is the 
price at which the things exchanged will be equal. 
Now the equality that may exist between economic 
goods can be nothing else but an equality of utility.^ 
And this equality is to be understood, not absolute- 
ly, in the sense that both exchangers will derive the 
same amount of satisfaction from the goods received, 
but relatively to the inconvenience that each suffers 
by depriving himself of the good transferred. ^ It 
was as obvious to the Schoolmen as it is to us, that 
in every economic exchange both parties make a 
gain, or think they do — otherwise the transaction 
could never take place. The utility that each obtains 
from the thing received is greater than he would have 
enjoyed by continuing in possession of the thing 

* Cf. Rev. A. Vermeersch, S. J., "Quaestiones de Justitia," 
theses, 25, 28, 29. 

^ Cf. Victor Brants, "Les theories economiques aux xiiie 
et xive siecles," p. 193, sq. 

^ Cf. St. Thomas, "Summa Theologica," 2a. 2ae., q. 77, a. i. 



parted with. Now, justice requires that these net 
gains should be the same for both sides. Such is the 
precise and commonly accepted meaning of the 
scholastic formula: "In an onerous contract the two 
parties should be benefited equally." It is held to 
be a deduction from the personal equality of all 
human beings. Men have equal rights, not only to 
subsist upon and acquire the fruits of the earth, but 
to profit by the exchange of such goods as they have 
legitimately acquired. ^ 

Since the price of goods is merely their value ex- 
pressed in terms of money, their value must always 
be so assessed and determined that the price will be 
just — that both parties will obtain the same quantity 
of net advantage. Understood in this sense, the 
value of things is primarily an ethical attribute. It 
is measured and formulated with reference, not 
merely to economic facts, but to this objective moral 
standard of equality of gain.^ If the gains resulting 
from the exchange of one coat for two pairs of shoes 
are unequal the goods have not been rightly valued, 
and the contract is not in accordance with ideal 
justice. In a word, justice is not realized by ex- 
changing commodities at any valuation that the 
contracting parties see fit to put upon them, nor at 
any other valuation whatever, except the one that is 
just, the just price. 

* Cf. Rev, A. Castelein, S. J., "Philosophia Moralis et 
Socialis," p. 208. 

* While criticizing the scholastic doctrine of just price, on 
the ground that, as he incorrectly assumes, it took no account 
of the factor of human desire, M. Gabriel Tarde adopts in so 
many words the scholastic formula of contractual justice. That 



Who is to ascertain and fix this just value of things 
in actual transactions ? Not those who make the ex- 
change, for they are liable to form prejudiced esti- 
mates, and the stronger bargainer will be tempted to 
use his power at the expense of the weaker. In the 
opinion of the Schoolmen, the valuation could be 
most reasonably and justly determined by the com- 
munity. They admitted, indeed, that the just price 
of goods was incapable of exact determination, and 
consisted in a "certain estimate" or approximation 
("quadam aestimatione"). Hence, they said, it is 
susceptible of three grades, lowest, medium and 
highest, all of which are legitimate as rules of prac- 
tical justice. This method of social appraisal seemed 
to them to be a fairly satisfactory device, inasmuch 
as it reduced the influence of the individual bias and 
individual selfishness (against which the whole doc- 
trine of just price was directed) to a minimum. Nor 
was the community to act arbitrarily in arriving at 
its common estimate; it was morally bound to take 
into account certain objective factors, chiefly, the 
cost of production, the scarcity, and the general 
utility of the goods appraised. Thus formulated, 
the "social estimate" was always the proximate deter- 
minant of just price. 

Upon this doctrine the writers whom we are now 
considering base the laborer's right to a Living 
Wage. Their argument runs thus : the workingman 
has a right to a just price for his labor ; the just val- 
uation of any kind of labor is that formed by the com- 

price, he says, will be just, "qui donnerait une satisfaction 
egale aux deux." "Psychologic economique," II. p. 44. 


mon estimate, or social judgment, of what is reason- 
able; now the social judgment declares that a man's 
wages ought never to be less than the equivalent of 
a decent livelihood; consequently, the just price of 
labor is never less than a Living Wage. 

The defenders of this view are careful to point out 
that the social estimate to which they refer is not the 
economic social estimate. The latter is determined 
solely by the movement of demand and supply, is 
produced unconsciously, by the "higgling of the 
market," and is always expressed in actual market 
prices. The ethical estimate is a deliberate pro- 
nouncement of the social judgment, made independ- 
ently of the price-determining action of competition. 
It declares the prices and wages that ought to exist, 
not those that do exist. In this sense the social 
estimate, we are told, maintains that when men are 
paid less than a Living Wage they are victims of 
injustice. ^ 

In considering the bearing of the doctrine of just 
price upon that of a Living Wage, we must dis- 
tinguish between its objective and subjective aspects. 
Equality of gain for the two exchangers is the ob- 
jective standard of ideal justice; while the subjec- 
tive application of the abstract rule to the concrete 
facts of industry is found in the social estimate, 
which is assumed to be the best available expression 
of the requirements of practical justice. Now, our 
contention is that neither the ideal standard nor the 

^ For an explanation of the difference between the scholas- 
tic theory of just price and a modern theory of economic value, 
the reader is referred to chapter II ; references to authorities 
on the former theory will also be found there. 



method of applying it affords a satisfactory logical 
basis for the Living Wage principle. 

The criterion of equal gains for the two parties to 
an economic exchange would seem, at first sight, 
to possess all the requisites of a correct rule of 
justice. Inasmuch as men are endowed with equal 
rights to acquire the resources of the earth, it seems 
reasonable to conclude that when two of them enter 
into a contract for the exchange of goods that they 
have lawfully acquired — a contract in which neither 
intends to enact the role of a philanthropist, but 
both wish to gain as much as possible — they have a 
right to equal quantities of gain. As we saw in the 
last chapter, equal rights to the earth do not, indeed, 
imply rights to equal amounts of it or its products ; 
but this is owing to the existence of other titles of 
ownership, such as superior needs, efforts and 
productivity, which modify the content of the pri- 
mary and fundamental title. No such considera- 
tions stand in the way of men's rights to equal gains 
from the exchange of their goods. When we look 
deeper, however, we find that there are other and 
very good reasons for rejecting this standard of 
equal gains. In the first place, there is the difficulty 
of putting it into practice. No statement of a just 
price in terms of money can be formulated which 
will enable the two contracting parties to make equal 
gains in the case of any good that is frequently 
bought and sold. Different men may purchase the 
same article from the same merchant at the same 
rate, and yet the personal advantage will not be the 



same for all of them. ^ According to the theory that 
we are discussing, all the buyers ought to profit to 
the same extent, provided that the merchant's gains 
on all the transactions are equal. And the chances 
of inequality are increased when the purchasers deal 
with different sellers. The situation is the same 
when the commodity dealt in is human labor. It is 
morally impossible to appoint a rate of wages from 
which the employer and every employee will obtain 
the same amount of net utility. 

Not only is this standard impracticable (except by 
an approximation so broad as to render it superflu- 
ous), but in a large proportion of cases it is unsound 
theoretically. For example, the man who gives his 
last dime to a prosperous baker for a loaf of bread, 
gains far more by the transaction than does the 
baker. The profit made by the latter is very small, 
say, one cent, and represents the satisfaction of a 
very trifling want. The other party to the contract 
has stilled the keenest pangs of hunger, and possibly 
warded off imminent starvation. Any other utility 
that he might have procured for his dime is, in com- 
parison with the one that he really obtained, insig- 
nificant. Consequently, the utility of the bread to 
him, whether considered in itself or relatively to any 
other good that he might have got for his money, is 
much greater than the advantage accruing to the 
baker. And yet no one would assert that in the 
ordinary conditions of production ten cents is not a 
sufficiently large price for a loaf of bread. In 

* Cf. J. A. Hobson, "The Economics of Distribution," chap. 
I; Tarde, op. cit., pp. 10-22. 



accordance with a well known law of value, the 
utility of a good to an individual is always propor- 
tioned to the importance and intensity of the want 
that it satisfies ; hence the more dissimilar the mate- 
rial conditions of the exchangers, the more will the 
gain of the poorer exceed that of the richer. If the 
two are to gain equally the poorer man must pay a 
price that all fair-minded persons would regard as 
outrageously exorbitant. Only in contracts between 
persons whose incomes are substantially equal does 
the rule of equality or gains seem to accord with our 
everyday conceptions of justice. When, for in- 
stance, a shoemaker gives a tailor a pair of shoes in 
return for a pair of trousers, their gains are about 
equal, since the wants supplied are nearly equal in 
importance. The inequality that we are discussing 
is even more striking and more frequent in labor 
contracts. No matter how low the wage, the labor- 
er gains more than the employer. The man who 
works for seventy-five cents a day satisfies in some 
fashion his most important and intense wants. Com- 
pared with this result the pain-cost of the exertion 
that he puts forth is quite small. The net advantage 
that he derives from the contract is, therefore, very 
large; whereas the employer's profit is a small 
amount of money which, in a great many cases, 
represents a few cigars or some equally secondary 
utility. According to the equal gain principle, the 
laborer is getting more than is just, although his 
remuneration is far below the limit of a Living 
Wage. As a general rule, the employer who has 
any considerable number of men on his pay roll does, 



indeed, obtain from the aggregate of his wage-con- 
tracts more utility — a greater satisfaction of wants 
both intensively and extensively — than any one of 
his employees, but his gain is less than the total gains 
of all of them ; and in any one contract it is smaller 
than the advantage received by the other party, the 

As a matter of fact, the Schoolmen never made 
any consistent attempt to apply the principle of 
equality of gains to industrial contracts. When 
they declared that the community, or, more precise- 
ly, those members of it whose reputation for fairness 
was highest, was the most competent agency to 
determine the concrete price that would safeguard 
equality between buyer and seller, they also de- 
clared, as we have seen above, that the decision of 
the community, the social estimate, ought to be 
based upon the general utility, the relative supply, 
and the cost of production of the commodity. Now 
,these are objective factors, but they are in no sense 
an expression or interpretation of the objective 
standard of equality of gains. A price fixed in ac- 
cordance with them would not always — would never, 
perhaps — enable both exchangers to obtain the same 
amount of profit. Hence the Schoolmen's working 
criterion of just price implies a complete setting 
aside of their ideal standard. Indeed, their insist- 
ence on the cost of production as one of the deter- 
minants of the just price of goods was a recognition 
of the principle of a Living Wage ; for cost of pro- 
duction in medieval industry was labor cost, the just 
measure of which was the customary needs of the 



class performing the labor. "With the canonists, 
this idea of class duties and class standard of com- 
fort is either explicitly or implicitly referred to as 
final test in every question of distribution or ex- 
change. Thus Langenstein — who, after being vice- 
chancellor of the University of Paris, was called to 
teach at the New University of Vienne in 1384 — lays 
down that everyone can determine for himself the 
just price of the wares he may have to sell, by simply 
reckoning what he needs in order to suitably support 
himself in his rank of life." ^ Thus, the Schoolmen 
measured the just price by a Living Wage, instead 
of basing the latter upon the former. 

So much for the theoretical standard : the practic- 
al criterion, the "social estimate," is unsatisfactory, 
either as a justification or as a measure of the Liv- 
ing Wage. To begin with, it is too vague. Does 
it describe the unanimous, or morally unanimous, 
judgment of the community — what the older writers 
called the "sensus communis" ? or, is it another name 
for "public opinion" ? Does it mean custom ? Possibly 
it refers to the deliberate judgment of a body of men 
chosen from the various classes, intellectual, in- 
dustrial and religious, of the community. Let us 
see whether any of these social estimates will serve 
to-day as a working rule of industrial justice. 

The first of them undoubtedly sanctions the prin- 
ciple of a Living Wage. Our knowledge of the 
average man's moral beliefs entitles us to assume 

^Ashley, op. cit., II, p. 391; cf. Brants, op. cit., p. 119, 
where the text and reference are given ; and Janssen, 
"Geschichte des deutschen Volkes," I, p. 447. 



that he holds, at least in the abstract, that the laborer 
ought to have the means of living comfortably and 
decently. But concerning the amount of subsist- 
ence goods comprised in the idea of a decent liveli- 
hood, the "sensus communis" lacks definiteness. 
The best that it can give us is a compromise derived 
from a multitude of individual or class estimates. 
We have, however, no means of ascertaining the 
content of this compromise, or average estimate, 
and, even if we had, we cannot be certain that it 
would be in harmony with reason and justice. In 
judging of the larger and more general questions of 
morality, the common convictions of mankind are 
sufficiently trustworthy ; but in details its judgment 
is easily perverted by the influence of bad and long 
established custom. 

Second, that somewhat capricious form of the 
social estimate, called public opinion, is vitiated by 
defects similar to those just enumerated. Its ver- 
dict concerning the precise requisites of a Living 
Wage will necessarily be too general, and too diffi- 
cult of ascertainment. It is, moreover, essentially 
variable and therefore untrustworthy. Indeed, if 
we accept the press as its mouthpiece we must admit 
that it has not declared in favor of even the princi- 
ple of a Living Wage. 

In the third place, it is undoubtedly true that a 
fairly definite standard of industrial justice is found 
in custom ; but it is not a reliable standard. The 
custom of our time approves of wages that are insuf- 
ficient to afl^ord the conditions of a decent liveli- 
hood — witness the remuneration of the "sweated" 



classes. As we saw in Chapter II, the canonist, 
Reiffenstuel, accepted custom as a criterion, and ar- 
rived at the conclusion that justice did not require a 
man's wages to be equivalent to a decent livelihood. 

Finally, the pronouncement of a carefully selected 
and representative committee would, it is probable, 
be sufficiently definite and trustworthy. If the social 
estimate, thus understood, declared that every laborer 
ought to have a Living Wage, and defined what it 
meant by this phrase, its decision would probably 
satisfy all reasonable minds, and be the nearest ap- 
proach to a correct estimate of a Living Wage that 
is practically attainable. Since, however, no such 
judicial body exists, its assumed pronouncements 
cannot be made to serve as the basis of the Living 
Wage doctrine. 

The theory which founds a Living Wage upon the 
principle of just price has been discussed at this 
length because the concepts and formulas underly- 
ing it dominated the industrial theory and practice 
of Europe for centuries, and because they are still 
quite common in ethical literature. One after an- 
other the Schoolmen of the Middle Ages asserted 
and expounded the principle that goods and labor 
had a certain just price. And they were right; for 
when we admit that a commodity can be sold at an 
exorbitant price we tacitly assume that it has some 
other price which is not exorbitant, which is just. 
An action cannot be adjudged wrong except by 
reference to some standard of right. The precise 
determination of that standard is another matter. 
The Schoolmen's theoretical formulation of it— 



equality of benefit or gain for buyer and seller — is 
undoubtedly a particular application of the general 
principle that, since men are by nature equal, justice 
regards them as essentially equal in relation to their 
property, and demands that whenever private prop- 
erty changes hands (except in the case of gifts) 
equality should be maintained between the thing 
parted with and the thing received in return. 
"Aequalitas rei ad rem," was the scholastic phrase, i 
According to this principle, property that has been 
unjustly taken away must be restored to the owner 
in its integral self or in its equivalent ; and, secondly, 
in free exchanges the thing received should be 
equivalent to the thing transferred. This general 
statement is correct, expresses, in fact, the very 
essence of abstract justice between man and man; 
but, as we have seen, "equality between the things 
exchanged" cannot consistently with distributive 
justice be translated into "equal gains for the ex- 
changers." ^ We have seen, too, that the Schoolmen 
never made any practical use of this theoretical in- 
terpretation of equality ; and we may be pardoned 
the wish that certain modern writers would discard, 
not only it, but certain kindred phrases and concepts^ 
that are equally ambiguous and misleading. A 
French economist, M. Charles Perin, has observed 
that many theological writers have hesitated to ac- 
cept the reasoning of Pope Leo's encyclical, accord- 

* See Costa-Rosetti, "Philosophia Moralis," thesis 107, 

* In fact, it may be laid down as a general principle that the 
reciprocal gains ought to be unequal whencTcr, and to the ex- 
tent that, such inequality will reasonably offset or correct 
previously existing inequality between the two parties. 

7 97 


ing to which the minimum just wage is based upon 
the laborer's dignity as a person, and measured by 
his essential needs. ^ Apparently they dislike to part 
with traditional modes of expression, and so con- 
tinue to repeat the old formulas about the laborer's 
right to a remuneration that is the "worth," or 
"equivalent," or "value," of his labor. In so far as 
these statements are true, they are truisms ; in so far 
as they have any concrete, serviceable meaning they 
are not true. If, for example, the word value be 
taken in the sense of the actual economic, or market, 
value of labor, the statement in question becomes 
equivalent to the assertion that the laborer is justly 
treated whenever he receives the wages that are as- 
signed to him by supply and demand, even though 
these may lie on the borderland of starvation, if 
moral value is meant the statement is correct, but 
not very illuminating, since it suggests no method 
of estimating the moral value of labor in terms of 
livelihood or wages. As to the practical interpreta- 
tion of just price provided in the social estimate, it 
seems to have served very well for the small com- 
munities and simple economic relations of the Middle 
Ages. 2 When masters and men lived together in a 
relationship "like unto that of fathers and sons"; 
when the whole body of consumers and producers 
who were interested in arranging a scale of wages 
and prices was found within the limits of a small 
town ; when the classes of goods and services that 
were to be appraised were few in number and simple 

^ "Premiers principes d'economie politique," 2d edition, 

pp. 389, 390- 

*Cf. Ashley, "Economic History," I, p. 138. 



in character ; and when the standard of Hving was 
nearly uniform throughout the community — in these 
circumstances the "communis aestimatio" of the 
just price of labor was apt to be more or less precise, 
and could be readily made manifest to all concerned. 
Moreover, the social estimate often became crystal- 
lized into custom. It was, therefore, not only defin- 
ite and patent, but more or less constant during long 
periods of time. And, since it was formed under 
the immediate and powerful influence or moral and 
religious teaching, it was in fairly close conformity 
with ethical ideals. ^ As a working rule of fair 
dealing, it is even to-day valid in principle; for it 
implies the essence of the arbitration idea, a disin- 
terested body of judges: but it stands in need of a 
new and more precise formulation. Its limitations, 
too, must be kept in mind : it is not an absolute but 
a subjective expression of right; and it must, as the 
Schoolmen insisted, always take account of certain 
objective factors, among which are man's natural 
rights to life, liberty, and a becoming amount of the 
comforts of life. 

Finally, we come to the doctrine which deduces 
the laborer's right to a Living Wage from his per- 
sonal dignity and his right to a decent livelihood. ^ 
It has been shown in the last chapter that, on account 

^ Cf. Ashley, op. cit., II, 388. 

' Cf. Rev. A. Pettier, "de Jure et Justitia," pp. 220-265 ; 
Verhaegen, "le minimum de salaire" ; Pope Leo XIII, in 
"Rerum Novarum" : "The preservation of life is the bounden 
duty of each and all, and to fail therein is a crime. It follows 
that each one has a right to procure what is required in order 
to live ; and the poor can procure it in no other way than by 
their wages." 



of his sacredness as a person, every member of a 
community has an abstract right to a decent HveH- 
hood, and that this right becomes concrete and actual 
when the material goods controlled by the commun- 
ity are sufficient to provide such a livelihood for all, 
and when the individual performs a reasonable 
amount of useful labor. It is assumed that the first 
condition is verified ; and it is maintained that the 
second is fulfilled by the man who labors for hire 
during a working day of normal length. His general 
right to as much of the earth's fruits as will furnish 
a decent livelihood is clear; the correlative obliga- 
tion of his fellow members of the community to ap- 
propriate and use the common bounty of nature con- 
sistently with this right, ought to be equally clear. 
Now, the simple and sufficient reason why this 
general right of the laborer takes the special form of 
a right to a Living Wage, is that in the present in- 
dustrial organization of society, there is no other 
way in which the right can be realized. He cannot 
find a part of his livelihood outside of his wages be- 
cause there are no unappropriated goods within his 
reach. To force him to make the attempt would be 
to compel him to live on less than a reasonable min- 
imum. And the obligation of paying him this 
amount of wages rests upon the members of the in- 
dustrial community in which he lives ; for they have 
so appropriated the resources of nature, and so dis- 
tributed the opportunities and functions of industry, 
that he can effectively realize his natural right of 
access to the goods of the earth only through the 
medium of wages. As long, therefore, as the 



present organization of industry exists, the obligation 
of not hindering the laborer from enjoying his right 
to a decent livelihood will be commuted into the 
obligation of paying him a Living Wage. 

The right to a Living Wage is asserted to be valid 
against "the members of the community in which the 
laborer lives." Whether the term "members" refers 
merely to the employers, or to other persons as well, 
or to the community in its civil capacity, that is, the 
State, will be fully discussed in later chapters. For 
the present it is sufficient to point out that tke right 
exists, and that it holds against those who are re- 
sponsible for converting the laborer's opportunity of 
getting a living into the opportunity of receiving 
wages. "The industrial community in which the 
laborer lives" can be defined only approximately. It 
describes that section of the world's inhabitants with 
which the laborer comes into somewhat close eco- 
nomic relations, chiefly, those who are primarily 
benefited by his labor, and those who have appro- 
priated that portion of the earth's resources that 
otherwise would be practically within his reach. 
Evidently these classes or persons are under obli- 
gations of justice toward the laborer that are shared 
only slightly, if at all, by men living on another con- 
tinent. The latter may, indeed, have been benefi- 
ciaries of the laborer's toil, but they cannot practical- 
ly do anything toward securing to him a Living 
Wage, beyond paying a fair price for his product; 
besides, they are under more pressing industrial obli- 
gations toward their immediate neighbors. It is 
also true that they have appropriated some of the 



common bounty of nature to which the laborer on 
the other side of the globe has, as one of the children 
of men, an indefinite birthright; owing, however, to 
the intervening distance, they have not vitally in- 
terfered with the realization of this right. Men's 
rights and obligations respecting their common 
heritage of material goods must be applied and 
interpreted with a reasonable regard to their various 
conditions of place, possession, ability, and oppor- 

One of the principal reasons why the right to a 
Living Wage has been obscured in the minds of 
many men, is the complexity of modern economic life. 
An example or two will illustrate this contention. 
Let us suppose that six men settle upon a no-man's 
land, and proceed to divide it amongst them. Al- 
though it is capable of affording a comfortable liveli- 
hood for all six, five of them — an undoubted majority 
— organize a government, and divide the land in such 
a way that the portion allotted to the sixth will barely 
keep him alive. Each of the other five is thus enabled 
to enjoy something more than a decent livelihood. 
Now, it is safe to say that ninety-nine of one hundred 
men would condemn this proceeding as unjust. 
They would maintain that the right of the sixth man 
to the whole amount of land distributed was just as 
good as the right of any of the others, and that no 
reason, title, or justification existed for depriving 
him of an equal share, when that much was essential 
to a decent livelihood. Imagine, now, a company of 
fifty men taking up their abode on a territory that no 
man has previously visited or claimed. Instead of 



dividing up the land, they till it in common, and dis- 
tribute its produce. Not all of them, however, labor 
upon the soil ; there is a shoemaker, a weaver, a tail- 
or, a carpenter, and so on ; every man performs the 
task for which he is best fitted. But the distribution 
of their common product is so carried out that forty- 
five can live in abundance, while the remaining five 
have merely the means of continuing to exist and 
work. The services of these latter, so the other fi/e 
assert, are not worth more than this pittance. Again 
it is palpable that the common product of a common 
property has been unjustly apportioned by the arbi- 
trary action of the majority ; for the five, we assume, 
perform a reasonable amount of useful labor. The 
case is precisely the same, at least in principle, in 
the more complex and elaborate industrial conditions 
of to-day : the members of a community who are in 
control of its land and resources, violate the laborer's 
right to live decently out of the common bounty of 
nature when they so take advantage of the existing 
distribution of private property as to deny him a 
Living Wage. In exercising their right of access 
to the earth, they make it impossible for the laborer 
to exercise his as fully as is demanded by decency 
and justice. And they do it just as effectively, they 
are as truly responsible for the laborer's inability to 
enjoy his natural right, as the greedy and arbitrary 
majority in the above mentioned examples. For 
the laborer, generally speaking, is as little able to 
change his location as are the harshly treated mem- 
bers of those two isolated communities. A few 
workingmen could, indeed, find a living elsewhere, 



but the overwhelming majority must stay where they 
are, or merely exchange places with one another, — . 
unless the whole machinery of industry is to stop, 
and mankind to perish off the face of the earth. 
The controllers of the industries and material re- 
sources of a community cannot get along without 
wage-workers; rather than make the attempt, they 
would gladly pay every one of them a Living Wage ; 
which is a clear indication that they regard the 
laborer as really worth that amount. Hence the 
complexity of the present industrial system obscures, 
but in no way annuls, either the rights of the laborer, 
or the correlative obligations of his fellow citizens. 

Another cause of the prevailing indifference to- 
ward these rights and obligations is ignorance and 
neglect of the common, or social, aspect of property. 
All too general is the notion sanctioned by the defi- 
nitions of property in the Roman Law and in the 
Civil Code of France, that a man has a right to do 
with his own what he pleases. ^ Such a claim Is 
obviously absurd, since men have not a right to do 
as they like with their faculties, to say nothing of 
the bounty of nature which was created for the bene- 
fit of all. They have a right to do with their own 
only that which is consistent with the rights of others. 
The private proprietor too often forgets that his right 
of ownership is valid only as a rneans to his right of 
use, and that the latter is a right common to all man- 
kind, which he is obliged to interpret and exercise 
within such limits that its realization shall be possible 

Cf. "Propriete, capital, et travail," by L'Abbe Naudet, 
pp. 29-31. 



for his fellow men likewise. He forgets that when 
he appropriates a portion of the earth's resources for 
his own use and benefit he diminishes by that much 
the amount available for private ownership by the 
rest of men. He forgets that his less fortunate 
neighbors, among whom must be counted the laborers, 
have, on account of their inborn right of access to 
the world's material goods, some sort of claim to 
that part thereof which he caMs his own. The ex- 
aggeration of the scope of individual ownership, and 
of the ability of the propertyless man to take care of 
himself in the competitive struggle, has converted 
into a maxim of business ethics the contention that 
employer and employee have no property rights 
against each other except those expressly named in 
the labor contract. The fact that a contract may 
be the occasion of a right which it does not explicit- 
ly provide for, is entirely overlooked. It is for- 
gotten that the laborer enters the wage-contract as 
a man endowed with a natural and indestructible 
right to a decent livelihood, which the contract 
renders impossible of realization except through the 
medium of wages. His right to a Living Wage is 
merely the former right as modified and determined 
by the contract. In so far as it is valid against his 
employer, it is produced neither by his contract with 
the latter nor by his right to a decent livelihood, 
taken separately, but by the two in conjunction. 

A truer and more humane conception of the re- 
lation between the right of individual ownership and 
the right of use, and of the duties of the private 
proprietor, was developed and fostered in medieval 


society. The Christian doctrine that private owner- 
.ship is not an absolute right, but merely a form of 
stewardship, according to which the individual holds 
his wealth from God and is obliged to administer it 
for the benefit of others, as well as of himself, was 
more frequently preached, and more generally and 
vitally accepted than it is to-day.* In the thirteenth 
century, we find Pope Clement IV permitting 
strangers to occupy and till the third part of any 
estate which the proprietor refused to put under 
cultivation himself. Pope Sixtus IV, in the fif- 
teenth century, made the same regulation with re- 
gard to domains in the Papal territory. ^ Here we 
have a clear recognition of the principle that a man 
has not a right to do what he pleases with his own, 
but only that which is consistent with the right of 
common ownership in his needy neighbors. Every 
man performing a function in the medieval organ- 
ization of industry, the lord of the land, the free 
tenant, the villain, the serf, the merchant, the master- 
craftsman, the journeyman, the apprentice, was 
regarded as rendering a social service. In return 
for this contribution to the community, the indi- 
vidual had a right, according to medieval theory, 
to security in his position or status, and to the means 
of living in conformity with the customs of his 
social rank. ^ This, again, was merely the doctrine 
of man's right to a living from the bounty of the 
earth, applied to the conditions of medieval society. 

*Cf. Cunningham, "Western Civilization," II, pp. 104-107. 
'^ Cf . Naudet, op. cit., pp. 35, 36. 

^ Cf. Weiss, "Apologie des Christenthums," IV, 368, sq. ; 
Ashley, "English Economic History," II, pp. 389-393- 



Concrete assertions of the same principle are heard 
to-day in the claim of the laborer that he has a right 
to work and a right to the job that he has held for 
a considerable time; in the conviction of the em- 
ployer that his workmen commit an act of injustice 
when they arbitrarily quit work; and in the conten- 
tion of the independent dealer or manufacturer 
that he has a right to the business of which he is 
deprived by the practice of temporary underselling 
pursued by the trust. The principle underlying all 
these beliefs, medieval and modern, is that formu- 
lated by Aristotle as a canon of social expediency, 
"it is best to have property private, but to make the 
use of it common" ; and by Aquinas as a requirement 
of justice, "it is right that the ownership of goods 
should be private, but the use of them ought to be 
common, so that the owner may readily minister 
therefrom to the needs of others." 

To the objection that some laborers possess other 
means of living in addition to their labor power, 
the answer is that these are rather rare exceptions. 
Whether they also have a right to a Living Wage, 
is of comparatively small importance. Still it 
would seem that the question ought to be answered 
in the affirmative, since they perform as much labor 
as their less fortunate fellows. At any rate, there 
are good social reasons for paying them as much as 
is received by the other workers of their group. 

A word will not be out of place concerning the 

wage-rights of women and children. According 

to the foregoing reasoning, it is evident that those 

women who are forced to provide their own suste- 



nance have a right to what is a Living Wage fof 
them. Since they have no other way of living but 
by their labor, the compensation therefore should 
be sufficient to enable them to live decently. Again, 
women doing the same work with the same degree 
of efficiency as men in occupations where both 
sexes are employed, have a right not merely to a 
woman's Living Wage, but to the same remunera- 
tion as their male fellow workers. Distributive 
justice requires that equally competent workers be 
rewarded equally. Moreover, when the women 
receive less pay than the men the latter are gradual- 
ly driven out of that occupation. ^ Unless we hold 
that an increase in the proportion of women work- 
ers is desirable, we must admit that social welfare 
would be advanced by the payment of uniform 
wages to both sexes for equally efficient labor. ^ 

Children of either sex who have reached the age 
at which they can, without detriment to themselves 
or society, become wage earners, but who cannot 
perform the work of adults, have a right to a wage 
sufficient to afford them a decent livelihood. They 
are entitled to this because their wages, generally 
speaking, constitute their sole source of mainte- 
nance. It must be noted that a Living Wage for 
children refers to their essential needs as members 
of a family, not to the requisites of boarding-house 
life, as this is not the condition in which working 
children are usually placed. Finally, children of 
either sex who perform the work of adults ought 

* Cf. Smart, "Studies in Economics," chapter on "Women's 

^Cf. Fairbanks, "Introduction to Sociology," p. 148. 



to receive the wages of adults, for the same reasons 
that justify the payment of men's wages to equally 
efficient women. ^ 

^ In speaking of a Living Wage, whether for men, women, 
or children, it is assumed that they are employed during the 
whole of the working time of the year. Consequently, women 
who are obliged to devote all their attention to household 
duties for a oonsiderable portion of the year, and children who 
attend school, are not entitled to a Living Wage for the entire 
year. As we shall see, their right to a Living Wage must be 
secured in another way. 



The Right to a Family Living Wage 

The controversy regarding the attitude of Pope Leo's 
Encyclical toward a family Living Wage. Cardinal Zig- 
liara's peculiar interpretation of the principle of equivalence. 
His argument from the family's relation to the work done 
by the husband and father. The theory that a wage suf- 
ficient for family maintenance is due merely as a matter 
of social utility. The theory that bases it on "equity." And 
on the sociai estimate. A family Living Wage is due to 
the adult male laborer because of his dignity as a man and 
his essential needs. An objection answered. The family 
Living Wage is a uniform quantity, and is due to all adult 
male laborers. The size of family to be taken as a measure 
of this wage. 

When Pope Leo XIII, in his encyclical, "On the 
Condition of Labor," declared that the remuneration 
of the workingman ought to be at least sufficient 
"to support him in reasonable and frugal comfort," 
a discussion immediately arose among Catholic 
moralists as to whether the phrase just quoted was 
intended to cover the conditions and requisites of 
family life. Those who held to the affirmative 
cited in confirmation of their position the following 
passage, which occurs in the next paragraph of the 
encyclical: "If a workman's wages be sufficient to 



maintain himself, his wife, and his children in rea- 
sonable comfort, he will not fir.d it difficult to 

put by a little property." 

Unquestionably the hypothetical wages referred 
to are assumed to constitute the compensation that 
is normal, but there is no explicit assertion that so 
much is due the laborer as a matter of justice. 
Within a few months after these words were writ- 
ten, a letter was addressed to the Holy See by the 
Archbishop of Malines, Cardinal Goosens, asking 
whether an employer would do wrong who paid his 
men a wage sufficient for personal maintenance, 
but inadequate to the needs of a family. Pope Leo 
did not himself send any official response, but re- 
ferred the matter to Cardinal Zigliara, who replied 
that the employer in question would not violate 
justice, but that his action might sometimes be 
contrary to charity, or to natural righteousness. 
At present all Catholic writers on the subject hold 
that the employer is under moral obligation to give 
the workingman a wage that will maintain his 
family as well as himself, but they do not agree that 
this obligation falls under the head of justice. In 
other words, some of them deny that the laborer has 
a strict right to a family Living Wage. ^ 

Cardinal Zigliara's explanation of his decision 
leaves something to be desired, both in clearness 
and in conclusiveness. He says that when a rela- 
tion of equality exists between the labor performed 
and the compensation received the demands of 

^ A critical review of this discussion will be found in 
Vermeersch, op cit., pp. 530-554. Cf. also, Turman, "Le 
Catholicisme sociale," pp. 58-68. 


justice are fully satisfied; and he plainly intimates 
that this condition is verified when the laborer Is 
paid merely an individual Living Wage. According 
to this reasoning, the minimum means of a decent 
livelihood is likewise the maximum that any laborer 
can claim as a matter of justice. A Living Wage 
is in all cases a completely just wage. As this as- 
pect of the wage problem does not come within the 
scope of our argument, it is given merely a passing 
mention to show the danger of attempting to base 
the right to a Living Wage upon assumptions of 
equality between labor and remuneration. He says 
that in labor-contracts the rule of equality must be 
interpreted with reference to the laborer's duty of 
self-support. The remuneration must be adequate, 
equal, to this end ; hence the relation of equality has 
for one term the laborer's wages, and for the other 
his purely personal needs. In the last chapter some- 
thing was said concerning the ambiguity to which 
the principle of equivalence is liable : the interpreta- 
tion that we are considering looks like an abandon- 
ment, or, at least, an essential transformation of it ; 
for the equality required is no longer between the 
things exchanged, labor and pay, or between the net 
gains of the two contracting parties, but between 
compensation and the laborer's welfare. The Cardi- 
nal defends his interpretation on the ground that 
human labor, being the product of a person, is of 
much greater dignity than merchandise, and ought 
not to be measured by precisely the same standard 
of contractual justice. Not merely the work itself, 
but the human doer of it, must be taken into account 



in determining its just equivalent. Undoubtedly; 
but why should it be assumed that a just equivalent 
is found in the bare essentials of decent living out- 
side of the married state? Since the laborer has 
many other needs, the satisfaction of which is mor- 
ally legitimate, does it not seem just that his wage 
should be capable of meeting all, or, at least, the 
more important of them? Ought it not to be the 
equivalent of a comfortable and care-free family 
life, of a college education for his children, an 
annual pleasure trip for himself and wife, and, for 
all of them, ample opportunities of cultivating the 
higher life? The assertion that the equivalence that 
ought to exist between pay and work is realized 
when pay equals a personal Living Wage, is reaily 
very like a begging of the main question. As an in- 
terpretation of the equality principle, it is quite as 
arbitrary and quite as incapable of proof as the one 
advanced by Father Antoine and noticed in the last 
chapter, namely, that the remuneration ought to be 
equivalent to the labor-force expended. 

Cardinal Zigliara says further that, since the 
product for which the laborer is paid is not partici- 
pated in nor increased by his family, justice does not 
require that his remuneration should be increased 
on their account. But those who defend the labor- 
er's right to a family Living Wage do not deduce 
it from any relation, real or assumed, between his 
family and the work that he performs or the employ- 
er that he serves. They derive it from his own 
dignity as a man. It is a personal prerogative 
which has, however, his family as a secondary bene- 

8 113 


ficiary. The Cardinal admits and maintains that 
the laborer has a right to a wage sufficient for his 
support outside of the marriage relation. Now this 
means that the laborer will give a part of his earn- 
ings to some merchant in exchange for the clothes 
that he wears, making the merchant to that extent 
a secondary beneficiary of his wages ; yet Cardinal 
Zigliara would not have argued that, since the 
clothier has nothing to do with the work performed 
by the laborer, the latter has no right to the portion 
of his remuneration thus expended. Neither does it 
follow that he has not a right to the measure of 
wages necessary to provide for his family. The 
two cases differ, indeed, in degree, but they are 
alike in principle. In both the primary purpose of 
the right asserted is the welfare of the laborer him- 
self, while the secondary end is in the former case 
the clothing merchant, and in the latter the laborer's 
family. As a matter of fact, the argument that we 
are criticizing looks like a different interpretation 
of the equivalence principle than the one discussed 
in the preceding paragraph. It points logically to 
the conclusion that the laborer has a strict right 
merely to the amount of compensation that will keep 
in repair those physical forces that are essential to 
the performance of his task. According to this 
interpretation, the relation of equivalence is not be- 
tween wage and reasonable personal needs outside 
of the married state, but between wage and expended 
labor- force ; and the laborer has a right, not to com- 
pensation that will support him in "reasonable and 
frugal comfort," but to that which will provide him 


with the bare necessaries of life and working effi- 

Father Antoine deduces the laborer's claim to a 
family Living Wage from considerations of social 
welfare. ^ In any rightly ordered society the father 
is the natural provider for all the members of the 
family; if he lacks the means of performing this 
duty adequately the result is pauperism, crime and 
other social evils. Hence the laborer who is the 
head of a family ought to receive compensation 
sufficient for the becoming maintenance of his wife 
and children. This much is due him from his em- 
ployer, not by any relation of strict justice — for 
under this head the laborer can claim merely the 
means of repairing expended energy — but as a mat- 
ter of "natural righteousness" or decency {'lion- 
nefete naturelle"). Because of his relation to so- 
ciety on the one hand, and to his employees on the 
other, the employer is morally bound to discharge 
this task. Concerning this argument it will be 
sufficient to say that the positive part of it is entirely 
sound ; for social welfare does require that the mar- 
ried laborer should command the means of properly 
providing for his family, and that the employer 
should furnish these means ; while the assertion that 
this minimum of remuneration is not due the labor- 
er by a title of strict justice, is based on the assump- 
tion, already criticized, that the equivalence between 
work and pay demanded by justice is fully satisfied 
by a wage that replaces the output of labor-force. 

According to Father Castelein, the value of a 

* Op. cit., p. 606. 



man's labor is always equivalent to an individual Liv- 
ing Wage, but not necessarily to a remuneration 
that will provide for the needs of a family. After 
the laborer has been paid a wage sufficient for per- 
sonal maintenance, and after the other factors of 
production have been fairly remunerated, there will 
normally remain a certain gross profit which in 
"general justice," or "equity," ought to be divided 
between employer and employee. If this distribu- 
tion is fairly carried out the laborer will, generally 
speaking, receive sufficient for his family's support. 
Like Father Antoine's, this view is correct on its 
positive side, but its denial of the laborer's right to 
anything more than the means of personal mainte- 
nance is but feebly defended by its champion. When 
Father Castelein turns from his perplexing and in- 
effective discussion of the kind of justice that is 
involved, he admits that a family Living Wage is 
due the laborer because of his dignity as a man. ^ 

Father Vermeersch asserts that the social esti- 
mate, which is always the proximate determinant of 
the just price of labor, regards the labor of the head 
of the family as worth at least a family Living 
Wage. He does not, however, content himself 
with this argument. If the laborer, he says, fails to 
secure this amount his personal independence, or 
personal dignity, is ignored; the exercise of some 
of his most essential powers and faculties is hin- 
dered ; his fundamental right to the use of the 
world's goods is violated. ^ The validity of the 

^ Op. cit., pp. 376-395- 
* Op. cit., thesis 29. 



argument from the social estimate has been suffi- 
ciently criticized in the last chapter. The argument 
from the personal dignity of the laborer, however, 
is sound, — is, in fact, the only one that rests securely 
on the fundamental principles of natural justice. ^ 

For the laborer who complies in a reasonable 
degree with nature's universal law of work, has a 
natural right to at least the minimum of the material 
conditions of decent and reasonable living. This 
proposition has received ample development and de- 
fense in foregoing chapters. Now a decent and 
reasonable life implies the power to exercise one's 
primary faculties, supply one's essential needs, and 
develop one's personality. Self-preservation is un- 
doubtedly the "first law of nature," but, if the ex- 
perience of the race is any criterion, self-propaga- 
tion is the second. At least, it is the expression of 
one of man's primary and strongest instincts. One 
of his most essential needs is the permanent love and 
companionship of a person of the opposite sex. The 
marriage state is not so imperatively necessary for 
right living as is security of life and a decent 
personal livelihood, yet it is of primary importance. 
The difference between these three needs is merely 
one of degree. All must be satisfied in the average 
man before he can live a reasonable and normal life. 
Without a religious vocation, the majority of men 
cannot reach a proper degree of self -development 
outside of the conjugal state. This is not to say that 
the man who has not been supernaturally called 

^ Among the ablest presentations of this view are those of 
Pottier and Verhaegen in the works already cited. 



cannot be celibate and chaste — a doctrine becoming" 
only to the foul of mind and weak of will — ^but it 
means that for the average man celibacy is not nor- 
mal, and consequently cannot be taken as a measure 
of reasonable and natural rights. The man who is 
forced by poverty to accept it supports an unnatural 
and unjustifiable burden, and is deprived of one of 
the chief means of normal self-development. Hence, 
"the minimum of the material conditions of decent 
and reasonable living" comprises, for the adult male, 
the means of supporting a family. To this much of 
the world's goods he has a natural right which is 
valid "against the members of the industrial com- 
munity in which he lives," In the case of the labor- 
er this claim must be formulated in terms of wages. 
To resume : the laborer has a right to a family Liv- 
ing Wage because this is the only way in which be 
can exercise his right to the means of maintaining a 
family, and he has a right to these means because 
they are an essential condition of normal life. 

It has been objected that according to this reason- 
ing, the laborer would be entitled to a wage sufficient 
to support his infirm and needy parents. To care 
for them is both his duty and his right ; consequent- 
ly he has a right to the one means adequate to this 
end, an increased remuneration for his labor. The 
cases, however, are not in all respects parallel. The 
right to become the head of a family is essentially 
different from the right to support infirm parents. 
The former is a necessary condition of normal and 
reasonable self-development, and implies the right 
to the material goods required for its realization. 



The right to the means of maintaining a family, 
therefore, is not finally derived from the duty of 
maintaining it — from the needs of the family — but 
from the laborer's dignity, from his ozuii essential 
needs. True it is that if the support of wife and 
children did not in the normal order of things fall 
upon the husband and father, he would not have a 
right to the additional remuneration required for 
this purpose; but this merely shows that the duty 
is the occasion, or condition, not the ultimate cause 
of the right. The right to the conditions of being 
the head of a family, which is obvious, implies the 
right to a family Living Wage, because nature and 
reason have decreed that the family should be sup- 
ported by its head. But the right to support one's 
needy parents rests upon an entirely different basis. 
Its existence is not an essential condition of right 
and reasonable life ; for in the normal order of things 
the parents themselves will have, or should have, 
taken precautions against such an emergency. And, 
as rights are not to be interpreted by the abnormal 
and exceptional exigencies of existence, the laborer 
cannot justly claim an increased wage on account 
of them. 

It is held by some that the laborer's remuneration 
should vary with the size of his family, but this seems 
an undesirable way of measuring it. There are 
many reasons why the cost of rearing the family 
should be regarded as a unit, and the laborer's wa- 
ges as a uniform rate. Then the cost of maintain- 
ing himself and wife until death and the children 
until they are of an age to be self-supporting, 



divided by his working time as an adult in full vigor, 
will give in terms of money the family Living Wage. 
Hence the laborer who is not yet married has a right 
to this family wage, and not merely to a remunera- 
tion that will suffice for his present needs. The 
difference should be reckoned as a necessary provi- 
sion for marriage, and, therefore, as slightly dimin- 
ishing the rate of pay that otherwise would be 
necessary as soon as the laborer entered the con- 
jugal state. 

Moreover, the right to a family Living Wage be- 
longs to every adult male laborer, whether he in- 
tends to marry or not; for rights are to be inter- 
preted according to the average conditions of hu- 
man life, and these suppose the laborer to become 
the head of a family. There is, too, a good social 
reason for treating married and unmarried alike in 
the matter of remuneration. If employers were 
morally free to pay single laborers less than a fam- 
ily Living Wage they would strive to engage these 
exclusively, and perhaps to exact a promise that 
they should not marry. Thus a premium would be 
placed upon a very undesirable kind of celibacy. 

The family that it seems reasonable to take as a 
basis for estimating the proper remuneration of the 
husband and father, is that containing the average 
number of children found in workingmen's families. 
This standard is not entirely satisfactory, since it 
not infrequently happens that the mathematical 
average is exceeded in a large number (a majority 
sometimes) of the families of a place, but it seems 
to be the best that is available. We cannot take 



"the number of children that is usual," as suggested 
by Father Vermeersch, ^ for the expression has no 
precise meaning; no such number exists. In five 
different groups of full-grown families (1636 in all) 
described in the Sixth and Seventh Annual Reports 
of the United States Commissioner of Labor, the 
following facts are to be observed : the number of 
children per family in a bare majority of the fam- 
ilies of three of the groups, was represented by three 
different figures ; in the other two groups the "usual 
number" was four different numbers. The prob- 
lem will be made somewhat more definite by an ex- 
ample : in one group, consisting of 832 families, the 
numbers most frequently recurring were three, four, 
and five ; that is to say, there were 149, 128, and 121 
families containing respectively three, four, and 
five children. Now it could scarcely be said that 
the "usual number" of children per family in that 
group was from three to five, for all these families 
combined were less than a majority. The average 
number, therefore, seems to be the only service- 
able criterion. Or, if that seems too low, since 
a majority of the families considered might be 
larger than the average indicates, the highest num- 
ber that is found in a considerable proportion of 
the families, might be adopted as the standard. In 
the group just referred to, the average number 
of children per family was 4.3, while the number 
in one-third of the families (347) was five or 
more. The estimates of a family Living Wage 
made on the basis of these two numbers would not 

*0p. cit., pp. 577, 578. 



be far apart. Hence it is sufficiently accurate to 
say that the family that ought to serve as a standard 
of measurement in the matter of decent remunera- 
tion for the adult male laborer, is one having four 
or five children. 

Note to Second Edition. — Certain reviewers 
have contended that, as the immediate object of the 
labor-contract is the work done, this, and not a 
family livelihood, is the term to which strict justice 
requires the wage to be equivalent. Now, the 
"work done" is either to be taken objectively — 
divorced entirely from the needs and sacrifices of 
the doer,— or it is not to be so taken. In the for- 
mer hypothesis, the market rate of wages must al- 
ways be regarded as just; in the latter, the "family 
needs" of the laborer have as vahd claims to be 
considered as have those individual needs which are 
not met by the market rate, yet which must be met 
if he is to live decently. But the author prefers to 
discard the "equivalence" concept entirely, and to 
regard the difference between the current rate and 
a family Living Wage, as due the laborer in virtue 
of his own personal dignity and the distributive 
function of the employer. Because of this function, 
his generic obligation so to use the resources of the 
earth that his neighbors will be able to obtain on 
reasonable conditions a decent livelihood therefrom, 
becomes a specific obhgation to pay his employees 
a family Living Wage. In a sense this obligation 
seems to belong to distributive justice ; nevertheless 
it is one of strict justice, precisely as is the obliga- 
tion of not imposing upon any individual a dispro- 
portionate amount of taxes. 



A Concrete Estimate of a Living Wage 

A more precise determination of a "decent livelihood" 
necessary. It can be made with sufficient exactness for prac- 
tical needs. A decent livelihood may be taken either ab- 
solutely or relatively to the conventional needs of a class. 
Estimates by various authorities of a decent livelihood in 
terms of goods. The slight discrepancies due to different 
viev^^points. Detailed statement of the elements of decent 
living for every section of the family. Professor Small's 
estimate of the minimum money wagt is too high. John 
Mitchell's estimate. The cost of living in the home of an 
exceptionally economical housewife. The cost of living 
as deduced from the expenditures in families in the cotton 
industry. A "revised" estimate of $601.03. This estimate 
confirmed by an analysis of the condition of families in two 
other industries. With a conservative allowance for lost 
time, $600 per year is equivalent to $2.10 per day. Con- 
clusion that anything less than $600 per year is not a Living 
Wage in any city in America, and that this amount is not 
sufficient in the largest cities. 

According to the argument of the last chapter, a 
decent livelihood for the adult male laborer means a 
wage capable of maintaining himself, his wife, and 
those of his children who are too young to be self- 
supporting, in a condition of reasonable comfort. 
(Henceforth when the phrase, "a decent livelihood," 


and "a Living Wage," are used without qualification 
they are to be understood in this sense.) The ques- 
tion naturally arises, what precisely does this imply 
in terms of goods or money? Unless an attempt is 
made to answer it, the whole discussion of wage- 
rights and obligations remains too abstract, too 
vague, to be of much practical value. There would, 
in fact, be some force to the objection that all the 
workingmen of America are even now paid a Living 

Evidently the question before us cannot be an- 
swered with absolute precision. The needs of men 
and their powers of making an effective use of a giv- 
en amount of goods or money, are too dissimilar to 
find a perfectly exact expression in any common de- 
nominator. And even if a common rate of wages 
would bring precisely the same degree of comfort to 
all the families depending upon it, there remains the 
supreme difficulty of translating "reasonable com- 
fort" into more concrete terms. In all probability 
the individual estimates of no body of men, however 
competent and well-meaning, would be in entire 
agreement. And no prudent person would assert 
that a slight deduction from the amount that he re- 
garded as certainly sufficient for a decent livelihood 
would render the remainder certainly insufficient. 
Nevertheless, the question can be answered with suf- 
ficient definiteness to safeguard the human dignity 
of the laborer and his family, and that is all that any 
one cares to know. We can distinguish twilight from 
darkness, although we cannot identify the precise 
moment when the one merges into the other. Though 



we cannot say just when artificial light becomes more 
effective than that of the waning day, we usually call 
it into service before the approaching darkness 
proves notably inconvenient. Thus it is in the 
matter of a Living Wage. Some rates of remunera- 
tion we know to be certainly adequate, and others to 
be no less certainly inadequate. While we may not 
be able to put our finger on the precise point of the 
descending scale at which the rate ceases to be suffi- 
cient, we can approximate it in such a way that the 
resulting inaccuracy will not produce notable incon- 
venience. We can, at least, define a limit below 
which it is wrong to go, while not committing our- 
selves to the conclusion that the limit is sufficiently 
high. In other words, a wage under the limit would 
be regarded as certainly too low, but a wage at the 
limit, as doubtful. An estimate of this character can 
be so formulated as to have a very high practical 

A decent livelihood may be understood either abso- 
lutely or relatively. In the former sense it is an 
unvarying standard that is applicable to all conditions 
of human existence. It takes no account of needs 
based on custom or on any subjective appreciation of 
the requisites of welfare, nor does it make any al- 
lowance for the possibilities of progress. It is 
measured solely by man's essential and universal 
needs, and describes in general terms the requisites 
of normal and reasonable human life. And it may 
obviously be either below or above what is known as 
the conventional standard of a community. For ex- 
ample, the men and women of America could live 



decent and becoming lives, absolutely speaking, with- 
out wearing shoes during the summer season. On 
the other hand, a conventional standard of living, 
though satisfactory to the people with whom it ob- 
tains, may fall short of the absolute norm. If the 
description given in Dicey 's "Peasant State" is cor- 
rect a large class of the inhabitants of Bulgaria, ap- 
parently contented, do not live reasonable human 
lives. * They have not the means of exercising that 
minimum of activity, physical, intellectual, and 
moral, which should differentiate the life of men 
from that of beasts. 

While the conditions of existence indicated by the 
absolute standard constitute a minimum below which 
it is wrong for men to descend, they are not sufficient 
for decent living in the case of most civilized com- 
munities. Man is everywhere affected by two classes 
of needs : objective, or natural ; and subjective, or ac- 

Through the influence of habit or custom he comes 
to regard certain of these acquired needs as essential 
elements of a decent standard of life. They differ 
relatively to different races, communities, ranks and 
classes of men, but to the persons among whom they 
have been developed they are of vital importance. 
Hence a decent livelihood, or a Living Wage, must 
conform in a reasonable degree to the conventional 
standard of life that prevails in any community or 
group. For, in order to live becomingly, men must 
possess not only those goods that are objectively 
necessary, but in some measure those that they think 

* Quoted in Mrs. Bwanquet's "Standard of Life," p. 9. 


are necessary. Indeed, the latter may become more 
indispensable to decent living than some of the things 
that are objective and primary; for men will some- 
times procure them at the expense of the others. 
Thus, many persons, men as well as women, will de- 
prive themselves of necessary food rather than appear 
among their neighbors in garments that are not in 
accordance with the conventional modes. At any 
rate, the inability to satisfy the more important of the 
conventional needs always involves a grave injury to 
self-respect, and therefore subjects human beings to 
hardships that are incompatible with normal and rea- 
sonable living. Finally, owing to the development 
of new wants, a decent livelihood now may be below 
the standard of decency that will prevail ten years 
hence. To ignore the newly developed wants then 
would be as harmful as to ignore existing wants now ; 
hence a Living Wage is relative not only to the com- 
munity or class, but to its different stages of develop- 

The content of a Living Wage for the laborers of 
America will be described first as a certain quantity 
of goods and conditions of living, and then in terms 
of money. The following estimates will prove sug- 
gestive and helpful : 

"Undoubtedly the first moral charge on the na- 
tional income is such a sum as is necessary to bring 
up a family, providing for health, education, effi- 
ciency of work, and the conditions generally of a 
moral life. Anything below such a level subjects 
human beings to hardships and temptations to which 
they should not be exposed, and to conditions in 



which men and women are not free but in bondag^e 
to physical wants. If the present system, or any 
system, did not promise this at some not distant 
period, we should have to say, like Mill, that, if 
this or communism were the alternative, 'all the 
difficulties, great or small, of Communism would 
be but as dust in the balance.' " * 

"The necessaries for the efficiency of an ordinary 
agricultural or of an unskilled town laborer and his 
family, in England, in this generation, may be said- 
to consist of a well drained dwelling with several 
rooms, warm clothing, with some changes of under- 
clothing, pure water, a plentiful supply of cereal 
food, with a moderate allowance of meat and milk, 
and a little tea, etc., some education and some 
recreation, and lastly, sufficient freedom for his 
wife from other work to enable her to perform 
properly her maternal and her household duties. . . . 
... .In addition, perhaps, some consumption of al- 
cohol and tobacco, and some indulgence in fashion- 
able dress are in many places so habitual that they 
may be said to be conventionally necessary, since 
in order to obtain them the average man and woman 
will sacrifice some things that are necessary for 
efficiency." ^ 

Professor Munro defines a Living Wage as, "a 
yearly wage sufficient to maintain the worker in the 
highest state of industrial efficiency, and to afford 
him adequate leisure to discharge the duties of 
citizenship." ^ 

^ Smart, "Studies in Economics," p. 302, note. 
- Marshall, "Principles of Economics," Bk. II, ch. IV, sec. 3, 
* "Economic Journal," June, 1894, P- 365- 


Mr. Devas summarizes the minimum livelihood 
that should be guaranteed to all workers thus : the 
means of physical existence ; practical possibility of 
marriage ; separate homes ; insurance against sick- 
ness, old age, and industrial accidents ; and some 
access to the treasures of literature, art and cul- 
ture. ^ 

"There is a growing feeling, not confined to 
Trade Unionists," say Sidney and Beatrice Webb, 
"that the best interests of the community can only 
be attained by deliberately securing to each section 
of the workers those conditions which are neces- 
sary for the continuous and efficient fulfilment of 
its functions in the social organism." ^ 

The Conference on the Christian Organization of 
Industry held at Holborn Hall, London, Nov, 29, 
1893, interpreted a Living Wage as a remuneration 
that would "enable workers to maintain healthy and 
human homes." 

Professor Patten holds that the workingman has 
a right to a home ; to become the head of a family ; 
to self-development ; to a share in the social sur- 
plus sufficiently large to make him comfortable ; 
to the leisure that is necessary for the revival of 
physical and mental powers ; to recreation for the 
sake of symmetrical development ; to cleanliness in 
and about the home ; and to some development of 
his sense of the beautiful. ^ 

According to President Gompers of the American 
Federation of Labor, a Living Wage is, "a wage 

^ "Political Economy," p. 498, 2d edition. 

* "Industrial Democracy," p. 590, ist edition. 

* "The Theory of Prosperity," pp. 218-227. 

9 129 


which, when expended in the most economical 
manner, shall be sufficient to maintain an average 
sized family in a manner consistent with whatever 
the contemporary local civilization recognizes as 
indispensable to physical and mental health, or, as 
required by the rational self-respect of human 
beings." ^ 

"In cities of from five thousand to one hundred 
thousand inhabitants," says President Mitchell of 
the United Mine Workers, "the American standard 
of living should mean, to the ordinary unskilled 
workman with an average family, a comfortable 
house of at least six rooms. It should mean a bath- 
room, good sanitary plumbing, a parlor, dining- 
room, kitchen, and sufficient sleeping-room that 
decency may be preserved and a reasonable degree 
of comfort maintained. The American standard 
of living should mean, to the unskilled workman, 
carpets, pictures, books, and furniture with which 
to make his home bright, comfortable, and attract- 
ive for himself and his family, an ample supply of 
clothing suitable for winter and summer, and above 
all a sufficient quantity of good, wholesome, nourish- 
ing food at all times of the year. The American 
standard of living, moreover, should mean to the 
unskilled workman, that his children be kept in 
school until they have attained the age of sixteen at 
least, and that he be enabled to lay by sufficient to 
maintain himself and his family in times of illness, 
or at the close of his industrial life, when age and 
weakness render further work impossible, and to 

^ "The American Federationist," April, 1898. 


make provision for his family against premature 
death from accident or otherwise. 

"This, or something like this, is the American 
standard of living, as it exists in the ideals of the 

unskilled workingmen For the great majority 

of men, who are willing to work and are not in- 
capacitated by physical, mental, or moral defects, 
the manner of living above described is an approxi- 
mate statement of what their standard should be; 
and with the great productivity of American labor, 
I believe it not unreasonable to say that these things 
should now be possessed by every workingman, 
however unskilled," ^ 

Father Vermeersch's estimate of the content of 
a Living Wage is as follows : moderate food, cloth- 
ing and shelter for the laborer and his family; 
festival days and some recreation; proper educa- 
tion for the laborer's children; and suitable provi- 
sion against accidents, disease and old age. ^ 

All of these estimates, however various the terms 
in which they are formulated, are in tolerably close 
agreement, except in the matter of provision for 
sickness, disability and old age. The cause of this 
discrepancy lies in the different viewpoints from 
which the problem is regarded. Writers who have 
in mind the requisites of social welfare, as Marshall 
and Munro, consider the Living Wage primarily 
in relation to the laborer's industrial efficiency. 
They do not take account of his needs during the 
time when he is unable to work because they are 

* "Organized Labor," pp. ii6, 117. 
' "Quaestiones de Justitia," p. 576, 



not describing what he ought to have as a man, but 
what he requires as an instrument of production. 
This is, of course, an entirely proper subject of in- 
quiry, just as is the cost of keeping a machine in 
repair or a horse in a condition of health and 
strength, but it has no necessary relation to that 
measure of the requisites of living which is due to 
the laborer as a man and an end in himself. The 
question that we are concerned with is not what a 
man must have in order to be a profitable producer, 
but what he ought to have as a human being. The 
estimates referred to, however, are instructive, in- 
asmuch as they indicate that in the long run social 
utility and the demands of individual justice are in 
substantial accord. 

The following is submitted as a rough estimate of 
the minimum amount of goods and opportunities 
that will suffice for decent living and the rearing of 
a family: 

I. Food, clothing and shelter for the laborer and 
his family until his children are old enough to be- 
come wage earners. 

(a) The Children. It was stated in the last 
chapter that the average number of children found 
in the workingmen's families of full growth, is the 
only practicable standard for estimating the extent 
of the family's needs under this head. A study of 
the families for which statistics are presented in the 
"Cotton Group" of the Seventh Annual Report of 
the Department of Labor leads to the conclusion 
that the average number of children in the families 
there described in which the mother had reached 


the end of the child-bearing period, was 4.4. The 
number of famiHes enumerated was 2,132; they 
were distributed over seventeen states, North, South, 
East, and West, and represented fifteen nationaHties. 

Except possibly during school vacation, no child 
of either sex should be employed as a wage earner 
under the age of sixteen years. Below that age they 
are, as a rule, not sufficiently strong to work day 
after day under the direction of an employer. Be- 
sides, if they are taken out of school earlier they get 
less than a fair share of education, and of the indus- 
trial opportunities depending upon it. ^ 

(b) The Wife. The welfare of the whole fam- 
ily, and that of society likewise, renders it impera- 
tive that the wife and mother should not engage in 
any labor except that of the household. When she 
works for hire she can neither care properly for her 
own health, rear her children aright, nor make her 
home what it should be for her husband, her chil- 
dren and herself. In the words of the Second 
Congress of Christian workingmen at Rheims, "la 
femme devenue ouvriere n' est plus une femme."^ 
Among the associations and individuals that have 
protested against the employment of wives and 
mothers, or at least of mothers, may be mentioned : 
the Union of Catholic Associations and Working- 
men of Fribourg, Switzerland (1893) ; the Social 
Christians of Germany; the Christian Democrats of 
Belgium (1894) ; the Catholic Association of Hol- 
land (1897) ; the Second Congress of Christian 

^ Cf. "Poverty," by Robert Hunter, ch. V. 
" "The wife become wage worker is no longer a wife." 
Quoted in Turman's "Le Catholicisme social," p. 55. 


Workingmen at Rheims (1894) ; the Catholic dele- 
gates to the Industrial Congress for the Protection 
of Workingmen at Zurich (1897); the Count de 
Mun ; and Cardinal Manning. * 

(c) Food. The laborer should have food suffi- 
cient in quantity, quality and variety to maintain 
himself and the members of his family in a normal 
condition of health and vitality. 

(d) Clothing. He should be able to provide him- 
self and family with clothing adapted in quantity 
and quality to the reasonable requirements of com- 
fort. In addition to being protected against the in- 
clemency of the climate, they ought to have the 
means of appearing in becoming attire on "social" 
occasions, in school, in church, and in public gath- 
erings. It is impossible to state precisely the mini- 
mum that is reasonable for this purpose, but speak- 
ing generally we may say that the laborer and his 
family should possess an outfit of "holiday" apparel, 
distinct from their ordinary or "everyday" gar- 
ments. This is essential to enable them to appear 
among their fellows without hurt to that self-respect 
and natural pride which are indispensable to decent 

(e) Shelter. Under this head it is sufficient to 
say that the dwelling occupied by the laborer and 
his family ought to consist of at least five rooms, 
and in general conform to the requirements of rea- 
sonable comfort. Three rooms (one for the par- 
ents, one for the male and one for the female chil- 
dren) are the minimum for sleeping accommoda- 

^ Idem, pp. 50-58. 



tions, and it would seem that at least two rooms are 
required for all other purposes. As to equipment, 
the house must, of course, be provided with a rea- 
sonable stock of furniture and utensils, and with the 
amount of heat, light and drainage essential to 
health and comfort. 

The material requisites of decent living may, 
therefore, be summed up as a reasonable amount of 
food, clothing and shelter for himself and his wife 
as long as they live ; and for four or five children 
until these have reached the age of sixteen years. 

2. Besides the needs that are constant, actually 
existent, there are others that are intermittent, and 
still others that will be felt only in the future. The 
laborer's remuneration ought to be sufficiently large 
to enable him to provide against accidents, sickness 
and old age. If it does not he will, when tempo- 
rarily or permanently incapacitated for work, be- 
come a burden on the community or on his children. 
In the latter case the wages received by the children 
would have to be increased beyond their own re- 
quirements. This is not in accord with the normal 
order of things, which suggests that a man's life 
toil should bring him sufficient provision for his 
life needs. 

3. Finally, the laborer and his family have cer- 
tain mental and spiritual needs, the satisfaction of 
which is essential to right living. The chief among 
them are: a moderate amount of amusement and 
recreation; education in the primary branches of 
instruction for the children; some periodical and 
other literature; membership in certain organiza- 



tions, such as benefit societies and Labor Unions ; 
and last, but by no means least, the means c>f fulfill- 
ing in a becoming manner the obligations imposed 
by charity and religion. 

Food, clothing, shelter, insurance, and mental and 
spiritual culture — all in a reasonable degree — are, 
therefore, the essential conditions of a decent live- 
lihood. Remuneration inadequate to secure all of 
these things to the laborer and his family falls be- 
low the level of a Living Wage. 

How shall we express these requisites in terms of 
money? The varying cost of living at different 
times and in different sections of the country is alone 
sufficient to render a single general answer exceed- 
ingly difficult. Nevertheless, an approximation can 
be made that will appeal to all fair-minded men as 
conservative and just, and will indicate with con- 
siderable definiteness an ideal of practical and 
practicable justice that, alas ! is yet very far from 
being realized. 

Professor Albion W. Small, who is at the head 
of the Department of Sociology in the University 
at Chicago, and who is one of the leading author- 
ities of the world in that science, declared a few 
years ago: "No man can live, bring up a family, 
and enjoy the ordinary human happiness on a wage 
of less than one thousand dollars a year. . . .All wa- 
ges should be paid within a certain scale. Let no man 
be paid less than the purchase capacity of one thou- 
sand dollars, which, I think, is the least a man can live 
on comfortably, educate his children, provide com- 
fortably for a family, and enjoy some human com- 


forts. Let no man be paid more than fifty thousand 
dollars, which is the salary of the President of the 
United States."^ 

The Statistics presented in the Sixth, Seventh 
and Eighteenth Annual Reports of the U. S. Bureau 
of Labor indicate that Professor Small's estimate 
is not too high if two conditions be verified : first, 
that, as he would wish, women and minors do not 
become wage earners ; and, second, that the laborer 
and his family be enabled to approach a certain de- 
gree of variety and fulness of life which is not ab- 
solutely required for what most men would regard 
as a reasonable and comfortable level of existence. 
To support his children, both boys and girls, from 
the years of sixteen until twenty-one, and his 
daughters from the latter age until they marry, 
would add very much to the cost of the family's 
living as above formulated. It is more than prob- 
able that society and, generally speaking, its women 
and minors, would be benefited if these were ex- 
cluded from the ranks of the wage workers. Boys 
would have greater opportunities of general educa- 
tion and special industrial training, and girls would 
necessarily be better equipped for and more willing 
to accept woman's true functions, those of wife, 
mother, mistress of the home, and moulder of the 
moral and spiritual life of the race. Moreover, the 
withdrawal of these two classes from the field of 
paid employments would, by eliminating a most 
demoralizing and intractable form of competition, 

^ Lecture delivered before the Central Y. M. C. A. of 
Chicago, as reported in the "Chicago Chronicle" of Dec. 13, 



bring about a general rise in the wages of men which 
would go very far toward making actual the ideal 
of Professor Small. However, it must be admitted 
that this condition, however much to be desired, 
cannot in any accurate use of language be described 
as indispensable to right and reasonable living. 
Similarly with the added amount of general comfort 
that a wage of one thousand dollars per year would 
probably insure: the laborer would be greatly 
benefited by it ; for he is a man, and man's capacity 
for progress is infinite; but our concern here is 
merely with the reasonable and irreducible mini- 

Mr. John Mitchell estimates the minimum wage 
that will maintain a workingman and his family 
according to the "American standard," as $600 a 
year. "It is, of course, true that this estimate ap- 
plies more exactly to workmen in towns of from five 
thousand to one hundred thousand inhabitants, than 
it does to other places. In speaking of $600 for 
unskilled workmen, I do not mean to include farm 
hands or men in rural communities, where the cost 
of living is less and the standard of Hving not so 
high. On the other hand, in cities of over one hun- 
dred thousand, and especially in cities of over half 
a million, $600 would, in my opinion, be insufficient 
to maintain this standard for unskilled workingmen. 
This is more especially true of the city of New 
York, where the cost of maintaining a fair standard 
of living would be much greater, owing to excessive 
rents, and where the ideal of a separate small house 
for the workman must itself be given up. For the 


great mass of unskilled workmen, however, resid- 
ing in towns and cities with a population of from 
five thousand to one hundred thousand, the fair 
wage, a wage consistent with American standards 
of living, should not be less than $600 a year." ^ 

On page 688 of the Sixth Annual Report of the 
Commissioner of Labor, there is a letter from Mrs. 
J. E. B., the wife of a workingman. The family is 
seven in number, and therefore may be regarded as 
normal. The earnings of the husband amount to 
$576 per year. In her letter the wife gives a de- 
tailed account of the average family expenditures 
for all purposes except clothing and sundries, and 
describes at some length her truly ingenious planning 
to economize in the matter of food. It is safe to 
say that seven out of ten housewives would be un- 
able to show as large results for the same outlay. 
Yet she is obliged to confess that in her efforts to 
make both ends meet she is like "the kitten that 
twirled round and round trying to catch its tail." 
The object sought was always in view, but never 
within reach. Any humane man or woman who 
will peruse carefully this interesting and instructive 
letter will be forced to the conclusion that, among 
the goods and opportunities enjoyed by the members 
of this family, not one was in excess of the bare 
requisities of decent Hving, and that the cost there- 
of ($576) was less than it would be in the majority 
of households. 

The following is an itemized statement of the 
average cost of living for one year of 2,132 families 

^"Organized Labor," pp. 117, 118. 


described in the Seventh Annual Report of the Com- 
missioner of Labor, pages 1678- 1682. The average 
size of these famiHes is 5.7, which is somewhat less 
than the number that we have taken to be normal. 

Food $287.06 

Rent 72.58 

Fuel 3575 

Lighting 4.90 

Clothing 107.40 

Taxes 5.43 

Insurance (property) 6.47 

Insurance (life) 20.22 

Organizations (labor) 6.06 

Organizations (other) 6.60 

Religion 10.29 

Charity 2.80 

Furniture and Utensils 19-79 

Books and Newspapers 5.35 

Amusements and Vacations 9.36 

Intoxicating Liquors 15-98 

Tobacco 10.48 

Sickness and Death 22.31 

Other Purposes 38.19 

Total for all Purposes $687.02 

The total average expenditure of the families in- 
cluded in this summary is stated in the Report to be 
$610.61, instead of the figure just given. The 
discrepancy arises from the fact that hundreds of the 
families investigated made no outlay on account of 
several of the items specified in the list, or that their 


expenditures under some heads were not included 
in the computations of the Report. For example, 
the expenditure for insurance on property is given 
for only 198 families ; the average contribution to 
labor organizations is based on reports from only 
155 families, and so on. Hence the total actual 
expenditures of all the families, for all purposes, 
divided by their number (2,132) gave $610.61, in- 
stead of $687.02. The latter sum would constitute 
the actual average if the families that expended noth- 
ing (or whose expenditures were not taken into 
account) for certain of the items specified, paid out 
under these heads as much as did those families 
whose accounts were included in the Report. This 
is a legitimate method of computation, since all of 
the purposes indicated in the list are necessary ele- 
ments in the cost of living. It was the total yearly 
outlay of such families as met all these wants, 
not the expenditures of those that were unable to 
meet some of them, that was normal. Let us examine 
briefly the separate items, to see whether any of them 
ought to be dispensed with, increased, or dimin- 
ished, in estimating the content of a Living Wage. 

The average expenditure for food was $287.06. 
In all of the Northern states but one, and in two 
of the states south of Mason and Dixon's Line, the 
average was considerably above this sum. On the 
other hand, the average food account in the family 
that we have considered in particular (that of Mrs. 
J. E. B.) was only $220.62. With regard to this 
difference of $66.44, it is to be noted that the ma- 


jority of housewives are less competent managers 
than this lady, and that, despite her exceptional 
economizing, her family did not have a reasonable 
amount of healthful, nourishing food. Hence it 
seems fair to add some fifteen dollars to her ex- 
penditures under this head, making the reasonable 
minimum $235.00, which is still $52.06 less than 
the sum in the list of the Labor Report. 

The annual outlay for rent in our list is $72.58. 
The average number of rooms per family repre- 
sented by this expenditure was 4.7, which is certain- 
ly the minimum that is consistent with the require- 
ments of comfort, health and decency. In all the 
Southern States but one, the rent cost was below 
this average of $72.58, but the houses which hired 
for this amount averaged only 3.4 rooms each. 
Moreover, it must be borne in mind that all the 
dwellings concerned were occupied by operatives in 
the cotton industry, and therefore situated in towns 
or smaller cities, where rent is considerably lower 
than in the great centers of population. To get 
anything like a fair, general average cost of decent 
housing, we must increase this figure to $84.00. 
That is only seven dollars per month, which, if any 
reliance may be placed on ordinary experience, is 
less than five-room houses can be obtained for in 
most instances. 

For fuel the average expenditures of the families 
in the Report was $35.75. It cost Mrs. J. E. B. 
only $24.00, but she was able to buy coal at two 
dollars per ton. This is notoriously less than the 
retail price of that commodity (even the "soft" 



varieties) in most localities. However, let us re- 
duce the list figure to $30.00. 

"Lighting, $4.90," is surely a sufficiently low esti- 

"Clothing $107.40," with the average number of 
children 3.5 per family, while the average number in 
families of full size is, as already noted, four or five. 
The parents of the families entering into the Report 
were of various ages of matrimonial existence, from 
the recently wedded upward. The average number 
of children per family, and the average cost of 
clothing them, was consequently smaller than would 
have been the case if all the couples had been married 
some sixteen or seventeen years. It is obvious that 
the maximum present cost of rearing a family is 
not reached before that period. Nevertheless we 
shall allow the above figures to stand unchanged. 

"Taxes, $5.40." Nearly one-half of the families 
investigated made no returns for this account. Let 
us reduce the amount to $3.00. 

"Insurance on property, $6.47." This seems 
sufficiently low, but we shall make it $5.00. 

"Life Insurance, $20.28." Let this be entirely 
eliminated on the assumption that from the time of 
his majority until his family attains its full numeric- 
al size, and between the period at which the first of 
his children becomes self-supporting and that at 
which he ceases to work himself, he will put by 
enough to provide for his old age. His living ex- 
penses will, of course, be smaller during these two 
intervals than when he has to support four or five 
children. We shall also assume that his total sav- 



ings are sufficient to cover the annual expenditure 
for "Sickness and Death," which, according to the 
Report, is $22.21. As human nature goes, this 
places upon the laborer an apparently unreasonable 
burden, but in order to guard against even the ap- 
pearance of generosity, we shall let it remain. 

"Labor Organizations, $6.06" ; "Other Organiza- 
tions, $6.60." When we recall the imperative 
necessity of Trades Unions, and when we reflect that 
"other organizations" include social and mutual- 
benefit associations, we are bound to conclude that 
these figures could not well be reduced. 

"Religion, $10.29" ; "Charity, $2.80." Both items 
seem very small. 

"Furniture and Utensils, $19.79," — ^^ irreducible 

"Books and Newspapers, $5.35." Schoolbooks 
for the children are included in this amount. It is 
a ridiculously small expenditure for the intellectual 
life of an American family in the twentieth cen- 
tury. It may reasonably be raised to $10.00. 

"Amusements and Recreation, $9.36." This is 
about one-third of the expenditures for these pur- 
poses by the same class of laborers in Europe. ^ It 
ought to be at least $20.00. 

"Intoxicating Liquors, $15.98." Let us reduce 
it to $10.00. 

"Tobacco, $10.48." Reduced to $8.00. 

"Sickness and Death, $22.31." As already stated, 
we assume that the laborer makes provision for 

^ "Seventh Annual Report of the Department of Labor/' p. 



these needs from his savings during the earHer years 
of his adult life. 

"Other Purposes, $38.19." To one who reflects 
for a moment on the numerous possibilities of legit- 
imate expenditure that must come under this head, 
the figure given will seem incapable of further re- 

A "revised list" of the minimum annual expendi- 
tures of a workingman's family would, therefore, 
take the following proportions : 

Food $235.00 

Rent 84.00 

Fuel 30.00 

Lighting 4.90 

Clothing 107.40 

Taxes 3.00 

Property Insurance 5.00 

Labor Organizations 6.06 

Other Organizations 6.60 

Religion 10.29 

Charity 2.80 

Furniture and Utensils 19-79 

Books and Newspapers 10.00 

Amusements and Vacations 20.00 

Intoxicating Liquors 10.00 

Tobacco 8.00 

Other Purposes 38.19 

Total for all purposes $601.03 

The Sixth Annual Report of the Commissioner of 
Labor presents the results of an investigation into 
10 14s 


the cost of living in the coke and iron ore indus- 
tries. ^ The average yearly expenditure for all pur- 
poses of 249 families in the former industry was 
$462.69; of 165 families in the latter, $390.93. 
These costs are obtained by dividing the number of 
families in each group (249 and 165) into the total 
amount annually expended by the group. As we 
found to be the case in the cotton group, so here, 
the dividend, that is, the grand total of expenditures, 
is lessened by the fact that many of the families 
paid out nothing under the head of some of the 
items represented in said total. For example, only 
211 of the 249 families in the coke group paid rent; 
of the remaining thirty-eight, five failed to send in 
reports to the investigators, and the other thirty- 
three owned the houses in which they resided. If 
these thirty-eight had paid the average rent paid 
by the 211 the total outlay entering under the 
head of rent into the grand total, would have been 
to that extent increased (38 times $58.19). A 
similar observation is to be made concerning all 
but two of the other purposes of expenditure; 
not one of them appears in the expense accounts 
of all the families. The pertinent fact for our 
study revealed by the statistics of the coke group, 
is that a family which would annually spend for 
all of the purposes represented in the grand total 
the average amounts that actually were spent by 
those families that spent anything therefor, would 
have living expenses of $562.94, instead of $462.69. 
And every one of these purposes of expenditure 

'Pp. 1300-1311. 



forms a necessary part of a reasonable standard 
of living. Moreover, the average size of these 
families was only 4.8 members ; the outlay per 
family on several of the accounts was palpably in- 
sufficient — rent being only $58.19, and representing 
only 3.4 rooms per family; and, in general, the in- 
dividual and detailed descriptions of those families 
paying rent, numbering more than five persons each, 
and expending less than $600 per year, shows that 
they lacked the requisites of reasonable comfort. * 
With regard to the families in the iron ore group, 
it must be observed: first, that by computing their 
cost of living according to the method just em- 
ployed, we get an annual expenditure of $459.32, 
instead of $390.93; secondly, there were only 5.2 
persons per family, the yearly outlay for rent was 
only $33.11, the houses ( ?) numbered only 3.4 rooms 
each, and many of the other costs, notably under the 
heads of food, clothing, religion, were entirely too 
low; and, thirdly, what has been said concerning 
those families of the coke group with a rent account, 
more than five members each, and a total outlay of 
less than $600 annually — may be asserted with 
emphasis regarding similarly placed families in the 
iron ore industry — with the possible exception of 
those fortunate enough to own a vegetable garden, 
or cows, hogs, poultry, etc. ^ Hence the records 
of these two groups of families, whose cost of living 
was apparently so much lower than that of the fam- 
ilies in the cotton industry, in reality confirms the 

ipp. 1107-1135. 
^'Pp. 1145-1165. 



conclusion that a normal family cannot live decently 
on less than $600 per year. 

Partly because of difficulties inherent in the situa- 
tion, and partly because complete and definite sta- 
tistics are lacking, it is impossible to state in terms 
that will be universally valid the equivalent of $600 
per year in daily wages. The reports of the Penn- 
sylvania Bureau of Industrial Statistics show that in 
forty-seven industries investigated, the percentage 
of time during which the men were out of work 
varied from fifteen in 1893, to three in 1898. The 
New York Bureau of Labor Statistics exhibits the 
rate of the unemployed among organized workmen 
(where it is usually less than among the unorgan- 
ized) from 1897 to 1901, as varying from nine per 
cent, to twenty-five per cent. ^ The Massachusetts 
Labor Report of 1887 placed the average unem- 
ployed of that state in 1885 at ten per cent., 
and the Commissioner of Labor of Illinois estimated 
it as twenty-five per cent, in his state in the year 
1886. ^ Mr. Spahr is of the opinion that, "it is a 
prosperous year indeed when the average wage- 
receiver aggregates forty-four full weeks of employ- 
ment." ^ That would make the percentage of lost 
time fifteen. Levasseur, however, declares that, 
"the average deduction which must be made for 
lost time is about ten per cent, under ordinary 
circumstances." * The widest investigation of 

* Cf. Final Report of The Industrial Commission, p. 733. 

* Cf. Charles B. Spahr's "Present Distribution of Wealth in 
the United States," pp. 100, loi. 

' Op. cit., p. loi. 

* "The American Workman," p. 399. 



this question is the one made for the Twelfth 
Census, which covered every occupation in the 
United States. The returns show, not the average 
amount of time lost by each worker, but the number 
and per cent, that were idle during any portion of 
the year, and the per cent, of these that were un- 
employed during a part or all of different groups 
of months. For example, of those engaged in the 
manufacturing and mercantile industries 28.3 per 
cent, were unoccupied for some part of the year : of 
these 46.5 per cent, lost from one to three months ; 
42.2 per cent, from four to six months; and 11.3 per 
cent, from seven to twelve months. ^ A conserva- 
tive computation from this table of returns indicates 
that the percentage of unemployment for all occupa- 
tions except agriculture and the professions, during 
the year covered by the investigation, 1899 and 1900, 
averaged between eight and ten per cent. And those 
years were unusually prosperous. However, if we as- 
sume that the average workingman loses only eight 
per cent, of his possible working time — about 310 
days per year, exclusive of legal holidays — an annu- 
al income of $600 would mean a daily w^age of 
$2.10. In case employment is absolutely uninter- 
rupted, these rates are equivalent to $1.94 per day. 

Since our estimate of $600 is based on the cost of 
living of families in the cotton industry in the year 
189 1, it is undoubtedly too low to serve as a stand- 
ard for the whole country at all times. House rent, 
car fare, recreation, social position, would make 
living dearer in the large cities than in the smaller 

* Volume on "Occupations," p. ccxxxv. 


centers of population in which these families resid- 
ed. In New York, or Boston, or Chicago, $600 
would not, even during periods of low prices, 
obtain the irreducible minimum of necessaries 
and comforts described in our "revised list." It 
would not command that amount of goods to-day^ 
in those towns in which the figures of the original 
list were gathered ; for the cost of living was six 
per cent, less in 189 1 than in 1903. ^ The conclu- 
sions that seem to be abundantly justified by the 
facts brought out in this chapter may, therefore, be 
stated as follows: first, anything less than $600 per 
year is not a Living Wage in any of the cities of 
the United States ; second, this sum is probably a 
Living Wage in those cities of the Southern States 
in which fuel, clothing, food and some other items 
of expenditure are cheaper than in the North ; third, 
it is possibly a Living Wage in the moderately sized 
cities of the West, North and East; and fourth, in 
some of the largest cities of the last-named regions, 
it is certainly not a Living Wage. 

Note to Second Edition. — According to care- 
ful studies and estimates made by several groups of 
investigators in 1906, the minimum cost of decent 
living for a family of moderate size was : in New 
York, $950; in Chicago, $900; in Baltimore, $750; 
while the average for these and several other large 
cities was $938. 

* October, 1905. 

^See Bulletin No. 53 of the Bureau of Labor, pp. 712, 723. 







The Underpaid Laborers of America: Their 
Number and Prospects 

Place of this and the following chapter in the discussion. 
No complete statistics of the underpaid obtainable. Partial 
statistics showing the proportion in several industries at 
the beginning and end of the last decade. Conclusion, that 
at least 60 per cent, of the male adults get less than $600 
per annum. Wages have greatly increased since 1850, but 
not so rapidly in the last 25 years as in the preceding 30 
years. The forces that have restricted, and seem likely to 
continue to restrict, the upward tendency of wages are: 
(a) monopolistic combinations, which can dispense with 
a considerable amount of labor power; (b) the rapid dis- 
placement of men by machines; (c) the unnecessary multi- 
plication of productive instruments, causing overproduction 
and unemployment. Mr. Hobson's analysis of this phe- 
nomenon. It may be operative at all times except those of 
unusual industrial activity. Fallacy of the older theory 
which affirmed the impossibility of general over production. 
Combined effect of the three forces described. Summary 
and conclusion. 

The endeavor of the foregoing chapters has been 
to show that the laborer has a right to a Living 
Wage, and to state the content of this right in terms 
of goods and money. The correlative obligation 
rests, it has been declared, "on the members of the 
industrial community in which the laborer lives." 


The next step would naturally be an attempt at a 
more specific definition of the phrase just quoted. 
Before entering upon this task, however, we shall 
try to get some idea of the proportion of American 
adult laborers that to-day fails to receive a Living- 
Wage, and to ascertain whether this proportion is 
likely to change in the near future. This inquiry 
will form the subject matter of the present chapter. 
In the chapter immediately following we shall strive 
to answer the question which asks whether the 
natural resources and productive powers of the 
country are sufhcient to afford a Living Wage to all 
its inhabitants. The discussion of these questions 
will make the whole treatise more concrete, and 
will give it more practical significance. As used 
hereafter, the phrase, "underpaid laborers," refers 
to adult male workers whose remuneration is less 
than $600 per year. 

No investigation has ever been made which shows 
the total number of workingmen in the United 
States employed at any given rate of wages. There 
was, indeed, an attempt in this direction by the offi- 
cials in charge of the Eleventh Census, but it was not 
successful. From the results of various partial in- 
vestigations, however, we can form a fairly accurate 
and sufficiently definite estimate of the number and 
proportion of the underpaid. 

The Eleventh Census (1890) gives the weekly 
rates of wages and the number of persons employed 
at each rate in fifty leading industries of 165 cities. ^ 
The investigation from which these results were ob- 

'Part II of the Report on Manufactures, p. xxix. 


tained was the most extensive of its kind that has 
ever been made, as it covered one-fourth of the em- 
ployees in the manufacturing and mechanical in- 
dustries. The number of establishments investigated 
was 44,225, and the number of males sixteen years 
of age and over whose rates of wages were obtained 
was 757,865. None of the reports of the Eleventh 
Census gives the number of employees who were 
above twenty-one years, nor the number of those 
between sixteen and twenty-one ; but from the tables 
of the Twelfth Census we learn that in 1900 the 
proportion of males sixteen years of age and over 
in manufacturing and mechanical pursuits who 
were minors, was eleven per cent. ^ If the same 
proportion existed in 1890, and if all the minors 
were among the 407,693 workers who received less 
than twelve dollars per week, forty-eight per cent, 
of the male adults failed to get a Living Wage. ^ 
But the wage returns upon which this estimate is 
based represent not merely wage receivers in the 
ordinary sense, but also company officers and firm 
members. According to the Eleventh Census, the 
average income of males above sixteen in the manu- 

* Volume on "Occupations," p. cxlii. That is to say, the 
minors formed ii per cent, of the whole number of males, — 
laborers, employers, and company officers, — above i6 years of 
age in these occupations. They were, consequently, a slightly 
higher percentage of the laborers alone, but the difference is so 
small that it may safely be disregarded. 

^ The assumption that all minors and women are in the 
underpaid class is made in the case of every group of employees 
considered in this chapter. The effect is to make the propor- 
tion of male adults in the class slightly less than it actually is, 
since some women and minors certainly get more than $600 fer 
year. But there is no other available method of even approx- 
imately distinguishing the wages of adult males. 



facturing and mechanical industries was nine per 
cent, higher when the latter classes were included 
than when they were omitted. Taking account of this 
fact and of the number of income receivers appearing 
in the highest paid group in the table that we are 
considering, we may safely conclude that the per 
cent, of adult male wage earners getting less than 
twelve dollars weekly was at least fifty-one. 

The Seventh Annual Report of the Commissioner 
of Labor indicates that eighty-four per cent, of 
17,650 employees in typical establishments in the 
iron and steel industry received in 1891 less than 
$2.01 per day.^ According to the Twelfth Census, 
seventeen per cent, of this class of workers in 1900 
were females and boys. ^ Assuming that the same 
percentage obtained nine years previous, we find the 
proportion of underpaid adults among the iron and 
steel workers at that time to be eightv-one per cent. 

The Fifth Annual Report of the Commissioner 
of Labor presents the rates of wages paid to railway 
labor in 1889.^ Of the 224,570 employees repre- 
sented eighty-six per cent, received less than $2.01 
per day. When eight per cent, is deducted on ac- 
count of females and boys the proportion of adult 
males that failed to get this rate appears as eighty- 
five per cent. * 

In the special report of the Twelfth Census (1900) 

»Pp. 840, 841. 

^Volume on "Occupations," p. cxlii. 

3 P. 83. 

* As in the case of the iron and steel workers, the percent- 
age of women and minors is assumed to be that prevailing when 
the Twelfth Census was made. See the volume of the latter 
on "Occupations," p. cxlii. 



on "Employees and Wages," returns are presented 
from what was undoubtedly the most careful in- 
vestigation that has yet been made of the rates of 
wages obtained by different classes of workers. ^ 
Representative establishments were studied in thirty- 
four "stable and normal industries," classified under 
the more general heads of textile, woodworking, met- 
alworking, and miscellaneous. As the chief purpose 
of the investigation was to show the movement of 
wages in the manufacturing industry between 1890 
and 1900, statistics were obtained for both of these 
years. The returns for 1890 indicate that sixty-nine 
per cent, of 105,106 males sixteen years of age and 
over received less than $12.50 per week. ^ Allowing 
eight per cent, for lost time, this is less than $600 
annually. When eleven per cent, is deducted on 
account of minors the proportion of underpaid adult 
males appears as sixty-six per cent. 

So much for the wages prevailing in 1889, 1890, 
and 1891. Of the condition of industry in 1900 the 
report on "Manufactures" of the Twelfth Census 
says : "It was a time of special activity and produc- 
tivity of manufactures" ; "the volume of industry 
had nearly reached its high-water mark" ; and 
furthermore, "the same general conditions prevailed 
in 1890" ; "there has been no decade in which busi- 
ness conditions were so nearly alike at its beginning 
and at its end." ^ The language of the Census Re- 
port is confirmed by the "Aldrich Report" and the 
monthly Bulletins of the Bureau of Labor, which 

> Pp. 2-779. 
2 Pp. 2-614. 
'Part I, p. lix. 



show that in 1889, 1890, and 1891 the general level 
of wages was higher than the average of the decades 
immediately preceding and following. ^ 

The special investigation discussed in the last 
paragraph but one, found that sixty-eight per cent, 
of 160,267 males of sixteen years and over were 
paid less than $12.50 per week in 1900. ^ Eliminat- 
ing eleven per cent, for minors, we see that the 
proportion of adult males that failed to get a Living 
Wage in typical establishments in the manufactur- 
ing industry was sixty-four per cent. 

Another table based upon this same investigation, 
containing returns from some establishments not 
represented in the table just considered, and omit- 
ting some of those included in the latter, discloses 
the fact that sixty-six per cent, of 156,552 males six- 
teen years and over obtained less than $12.50 per 
week. ^ With eleven per cent, deducted for minors, 
the proportion of underpaid male adults in this group 
in 1900 was sixty-two per cent. 

According to the Thirteenth Annual Report of 
the Interstate Commerce Commission on the Sta- 
tistics of Railways, eighty-two per cent, of the 1,008- 
068 persons, exclusive of officers, in this industry 
in 1900 received at that time wages that averaged 
less than $2.05 per day. * The Sixteenth Annual 
Report of the Commission shows that in 1903 sixty- 
nine per cent, of the 1,302,494 railway employees — 
officers of the roads again being excluded — obtained 

* Cf . Ely, "Evolution of Industrial Society," pp. 112, 113. 
^"Employees and Wages," pp. 2-614. 
® "Employees and Wages," pp. 616-779. 

^ Pp- 34, 40- 



average wages of less than $2.09 daily. ^ Eliminat- 
ing eight per cent, on account of women and minors, 
we see that the average per cent, of underpaid adult 
males for the two years was seventy-two. It must 
be noted that this estimate is based on the Commis- 
sion's statement of the average rates paid to the 
different classes of employees, and consequently that 
many individuals in some of the classes in which the 
average level was below $2.10 per day, received a 
higher remuneration. On the other hand, many 
members of classes whose average was above that 
rate obtained less. Probably one group balances the 

A partial confirmation of these estimates of the 
proportion of underpaid male adults at the begin- 
ning and end of the last decade of the nineteenth 
century is obtained from statistics presented by sev- 
eral of the state labor bureaus. A noteworthy fea- 
ture of these returns is that they represent a much 
larger proportion of all the employees in their re- 
spective states than do the foregoing statistics with 
regard to the country at large. Moreover, they are 
all from states in the North and West, in which 
wages are at least up to the average rates for the 
whole United States. Only a summary will be given 
of the estimates based on state statistics. For the 
sake of a more satisfactory and comprehensive view 
of the entire field, the table includes a summary of 
the estimates already given in detail. 

» Pp. 38,43. 



Number Per Cent, 
of Adult of Adult 
Employees and Years Males Males 

Represented: Represent- Under- 

ed: paid: 

n 50 Manufac. Industries, 1890,^ 757365 51 
n Iron and Steel, 1891,^ 17,650 81 

n Railway Occupations, 1889,^ 206,604 85 
n 34 Manufac. Industries, 1890,* 93.544 66 
n 34 Manufac. Industries, 1900,^ 142,638 64 
n 34 Manufac. Industries, 1900,^ 138,331 62 
n Railway Occupations, 

1900 and 1903,^ 2,125,717 72 

n Manufac, Mass., 1890 and 1891,® 367,311 59 
n Manufactures, Wis,, 1891,® 70,326 61 

n Manufac, Minn., 1899 and 1900,^° 99,872 53 
n Manufac, Mass., 1899 and 1900, 511,727 64 
n Manufac, Wis., 1899, 1900, 1901," 217,522 75 
n Manufac, N. J., 

1899, 1900, 1901,^* 387,903 60 

En Manufac, III, 1900 and 1901,^* 135,890 58 
No attempt is made to estimate the total number 
of underpaid workers represented in the table, be- 
cause many of them are counted more than once in 

^ Eleventh Census, "Manufactures," Pt. II, p. xxix. 

* Seventh Annual Report of Com. of Labor, pp. 840, 841. 
^ Fifth Annual Report of Com of Labor, p. 83. 

* Twelfth Census, "Employees and Wages," pp. 2-614. 

* Ibidem. 

' Idem, pp. 616-779. 

' Thirteenth & Sixteenth Reports of Interstate Com. Com- 
mission, pp. 34, 40 ; 38, 43. 

* Annual Statistics of Manufactures for 1891. 
"Report of Bureau of Labor Statistics for 1891-92. 
"Report of Bureau of Labor for 1899-1900. 
"Annual Statistics of Manufactures for 1900. 
'^Report of Bureau of Labor Statistics for 1900-01. 
"Reports of Bureau of Labor Statistics for 1900 & 1901. 
"Report of Bureau of Labor Statistics for 1902. 



the summaries, and the entire number represented 
is small relatively to the whole number of underpaid 
in the United States. The important feature of the 
table is the percentages, which may be taken as fair- 
ly representative of average wage conditions in 
manufacturing and railway industries. And the 
general level of remuneration in these two fields is 
undoubtedly quite as high as the average of all the 
other urban occupations. It is to be noted, more- 
over, that these precentages reflect the conditions 
of 1890 and 1 900- 1 903, when wages were about as 
high as they are at present (1905) fully as high as 
the average of the last fifteen years, and higher than 
that of the last twenty-five years. 

The majority of the percentages are above sixty, 
while the only notable percentage below that figure 
is the first one in the table. The Eleventh Census 
indicates that only fifty-one per cent, (approximate- 
ly) of the male adults employed in manufacturing in- 
dustries in 1890 received less than twelve dollars per 
week. Yet the special investigation undertaken by 
the director of the Twelfth Census shows that the 
proportion obtaining under $12.50 per week in the 
same industry the same year, was sixty-six per cent. 
The investigation from which the smaller figure was 
drawn covered a much larger number of men than 
did the one just mentioned, but there is every reason 
to believe that it was less scientifically and carefully 
carried out. Moreover, investigations of the manu- 
facturing industries of Massachusetts and Wisconsin 
for this same year 1890 developed the fact that the 
percentages of underpaid in these states were re- 

II 161 


spectively fifty-nine and sixty-one. It is probable 
therefore that sixty-six per cent, is nearer the actual 
figure than fifty-one. When due weight is given to 
all the percentages in the table the conclusion seems 
justified that at least sixty per cent, of the adult male 
workers in the cities of the United States are to-day 
(1905) receiving less than $600 annually.^ 

What of the future ? Do the wages of the poorest 
paid classes show any tendency to increase? All 
students of the subject admit that wages as a whole 
have greatly increased since 1850, The necessaries 
and comforts of life, on the other hand, seem to be 
at about the same price-level that prevailed at that 
date.^ The net result, therefore, is a considerable 
improvement in the condition of the laboring classes 
generally, since the middle of the last century. 

There are, however, serious reasons for thinking 
that the upward movement of wages has been much 
smaller during the last twenty-five years than it was 
during the preceding thirty years. The census of 1890 
gives us no definite information concerning the 
course of wages during the decade immediately pre- 
ceding that date, because it differed in the scope and 
form of its inquiry from the census of 1880. Hence 

^ Writing in the "Annals of the American Academy of 
Political and Social Science," September, 1904, Mr. Wm. 
English Walling estimates that more than two-thirds of the 
male adult laborers fail to get $600 per year, but his argument 
is not altogether conclusive. 

^According to the Aldrich Report (pp. 8, 9) the cost of 
living (rent excluded) was considerably higher in i860 than in 
1850, but there was a decline of 5.6 per cent, from i860 to 
1891. Between the latter year and 1903, it rose (rent again 
excluded) 6.3 per cent. (Bulletin No. S3 of the Bureau of 
Labor, p. 72^.) Since 1903 prices have fallen somewhat. 



we are warned by those in charge of the former that 
the wage statistics of the two censuses can not be 
compared. ^ The Aldrich Report declares that the 
rise in wages during this decade amounted to twelve 
per cent,^ This estimate has been severely criticized. 
It has been asserted that the establishments selected 
for investigation were not truly representative of 
their respective classes. For example, one dry goods 
store and one grocery store, employing together less 
than thirty clerks, were taken as typical of the whole 
retail business ; and the exceptionally high wages 
that they paid, as representative of the remunera- 
tion of the whole of this class of workers. Again, 
it is charged that the statisticians who summarized 
the returns of the investigation were in sympathy 
with its political aim, which was to show the great- 
est possible increase in wages.^ Thus, in computing 
the average wages paid in a certain brewery — the 
only establishment in that industry from which 
returns had been secured — they put the head brewer, 
who received $23.96 per day, in a series by himself. 
He was, accordingly, given as much weight in deter- 
mining the average for the whole establishment as 
each one of the other classes of workmen. One of 
these classes contained thirty-three men. In conse- 
quence of this method, the average wage of the 
brewery appeared as $4.12 per day, although a ma- 
jority of the employees actually received less than 
two dollars. A further and more far reaching result 

^"Abstract of the Eleventh Census," p. 139. 
2 P. 14. 

*Cf. Spahr, "Present Distribution of Wealth in the 
United States," p. 106, sq. 



was that the quotations for the brewing industry 
presented in the Aldrich Report are seventy per cent, 
too high. As Professor Bullock remarks, "this 
typical brewer who receives over $6,cxx) per year. . . 
. . . was certainly worth that amount for statistical 
purposes."^ Finally, an investigation made by the 
United States Bureau of Labor into the wages of 
twenty-five occupations in a few of the leading cities 
of the country, showed an increase for this decade of 
eight per cent.^ After due allowance has been made 
for the various defects in the three sources of infor- 
mation considered in this paragraph, the conclusion 
seems valid that a real rise in general wages took 
place between 1880 and 1890, but that it did not 
amount to twelve, nor, in all probability, to eight per 
cent. The Aldrich Report states that prices fell nine 
per cent, during the same period. 

According to the table given above, the number of 
male adults receiving less than $12.50 per week in 
thirty-four manufacturing industries was sixty-six 
per cent, in 1890 and sixty-four per cent, in 1900, — 
a gain of two per cent, for the decade in the pro- 
portion of those getting a Living Wage. An inves- 
tigation made by the United States Bureau of Labor 
of forty-two manufacturing and mechanical in- 
dustries shows that weekly wages increased eleven 
per cent, and the cost of food nine per cent, between 
1890 and 1904. ^ The net gain to labor between 

* Quarterly Publications of the American Statistical Asso- 
ciation, March, 1899. 

=■ Bulletin No. 18, p. 668. 
'Bulletin No. 59, p. 18. 



1890 and any year in the present century seems, 
therefore, to have been inconsiderable. 

The incomplete and in some respects unreliable 
statistics at hand indicate, therefore, that the im- 
mense improvements in production that have been 
brought about within the last quarter of a century, 
have not been followed by a corresponding improve- 
ment in the condition of the laborer. His wages have 
risen, indeed, during this period, but neither so stead- 
ily nor to such an extent as might with reason have 
been expected. These statements refer to general 
wages. Since the greatest advances in remuneration 
have occurred among the organized — who are also 
the better paid — workmen, there is some reason to 
think that the wages of the poorest paid have not 
kept pace with the general increase. ^ 

Now those features in the evolution of the pro- 
cesses of production which seem to have restricted 
the upward trend of wages in the recent past, will 
in all probability show the same tendency for a long 
time to come. The first of them is the prevalence 
of monopoly. In his Minority Report as member 
of the Industrial Commission, Mr. Phillips estimates 
the value of the industries of the country that are 
more or less monopolistic in character at $17,000,- 
000,000, "or probably one-fifth of what the present 
census will find to be the estimated true value of all 
property in this country." ^ As a matter of fact, 
the great combinations formed in recent years have 
paid at least as high wages as their independent 

^ Cf. the table of the relative wages prevailing in various 
occupations found in the Aldrich Report, p. iii, sq. 
* Final Report, p. 684. 



rivals. * This, however, is but one phase, and very 
probably a temporary one, of the situation. Be- 
cause of their more economical organization, the so- 
called trusts can turn out a given amount of product 
with a much smaller labor force than is required in 
a regime of competition. Unless they make their 
output larger than it would have been under the old 
system, they will consequently be able to reduce the 
number of their employees. They cannot profit- 
ably increase the output without reducing prices to 
the consumer, and this, as experience shows, they 
will not do. Their usual practice runs in the oppo- 
site direction. The result is that men are thrown 
out of employment, to enter into competition with 
their fellows both within and without the combina- 
tions, and thus bring down the wages of all. On 
the other hand, the increased cost of living which 
follows a monopolistic organization of industry 
affects the laborer precisely as it affects other con- 

The second disquieting fact among the present 
tendencies of the productive process is the displace- 
ment of men by machines, ^ Professor Smart gives 

* Cf. Final Report of the Industrial Commission, p. 625 ; 
and Clark's "Problem of Monopoly," p. 69. 

^ Referring to the last decade of the Nineteenth century, 
the Twelfth Census tells us : "A factor that has had a real 
tendency to lower the actual average earnings of the wage- 
earner in many of the industries is the displacement of the 
skilled operative by machinery, which permits the substitution 
of a comparatively unskilled machine hand. This tendency is 
noticeable in many lines of industry. Its effects are twofold ; 
to reduce the number of employees producing the same or an 
increased quantity of product ; and to reduce the average rate 
of wages because of the lower degree of skill required." 
"Manufactures," Pt. I, p. 123. 



it as his opinion that we are only at the beginning of 
the machine age, and that the need for man is for the 
moment becoming less and less in all fields where 
machinery is entering.^ If the need for man grows 
less, will not the proportion of unemployed grow 
greater? One obvious answer to this question is a 
reference to the experience of the past. Up to the 
present the substitution of machinery for hand proc- 
esses does not seem to have caused any permanent 
increase in the proportion of unemployment. The 
number of idle men is probably no greater, relatively 
to the whole working population, than it was before 
the coming of the machine regime. And yet, it must 
be borne in mind that this result is a mere accident, 
for there is no necessary connection between the in- 
troduction or extension of machine production and 
the continuity of employment. - On the contrary 
there is reason to fear that a more or less direct ratio 
exists between the increase in the rate of machine 
substitution, and the increase in the rate of unem- 
ployment. Assuming that the former will be quite 
marked for some time to come, we must, it would 
seem, expect the percentage of the unwillingly idle 
to increase likewise. Every time a new labor-sav- 
ing machine is introduced some men are thrown out 
of work; consequently, the greater the amount of 
such machinery that is put into operation in a given 
year, the greater is the number of men that are un- 
employed during some part of that year. Ultimate- 
ly they may ail be absorbed in the old industry or in 

*Cf. "Distribution of Income," p. 235, note. 
'Cf. Hobson, "Evolution of Modern Capitalism," ch. VIII. 


related occupations, but there is at least an increase 
in the number of those who are temporarily unem- 
ployed ; and the more rapidly their number is aug- 
mented, the larger will be the sum total of unemploy- 
ment, for the process of readjustment will not keep 
pace with the acceleration of machine substitution. 
Thus, if the new forms of machinery brought into 
use in a community this year supplant one thousand 
men, whereas those introduced last year displaced 
only five hundred, it is more than probable that the 
amount of unemployment will be greater this year 
than last. Each of the one thousand men will be 
out of work for more than half the number of days 
during which each of the five hundred was idle. 
Any increase in the rate at which men are displaced 
by machines, therefore, increases unemployment, 
and thus tends to lower wages. 

In addition to the rapid introduction of new forms 
of capital, the unnecessary multiplication of existing 
forms seems liable to impede the upward movement 
of wages by augmenting unemployment. We save 
too much and consume too little. Too much of the 
annual product of the nation is converted into ma- 
chinery. *'In a given state of the arts and with 
given habits of consumption, a certain amount of 
machinery can be advantageously utilized ; a larger 
amount than this is waste. We have for generations 
been cultivating notions which should make individ- 
uals reduce their consumption and increase their in- 
vestment until we could obtain the required amount ; 
and we have apparently overdone the matter." * 

^ Hadley, "Economics," sec. i6i. 


The influence of over-accumulation of capital upon 
employment is so well described by Mr. Hobson 
that his words are worth quoting at some length : 

"In order to test the case, take a community with 
stable population where there has existed a right 
economic relation between forms of capital and rate 
of consumption. Suppose an attempt is initiated to 
increase savings by abstention from consumption of 

some class of goods, say cotton Since no trade 

requires increase of capital, the new savings may 
as well be invested in the form of new cotton mills 
as in any other way. Let us suppose that the over- 
saving of the first year is capitalized in this form. 
What has occurred during this first year is that an 
increased employment of capital and labor in mak- 
ing cotton mills has balanced a diminished employ- 
ment in making cotton goods. Assuming an abso- 
lute fluidity of capital and labor, the net employment 
for the community is not affected by the change. Peo- 
ple have simply been paid to make cotton mills in- 
stead of to make cotton goods. At the end of the year 
there exists an excess of cotton mills over what 
would have been required if consumption of cotton 
goods had stood firm, a double excess over what is 
needed to supply the now reduced demand for cotton 
goods. If it seems unfair to any one that I should 
apply the over-saving to the only trade where the 
demand is absolutely reduced, I can only reply that 
it simplifies the argument and makes no real differ- 
ence in its validity. If we assume the saving to be 
equally distributed among all trades, then at the end 
of the year all trades would be to a minor degree in 


the same condition as the cotton trade is according 
to my illustration. 

"If savers were mad enough to continue this 
policy, preferring the growing ownership of useless 
cotton mills to the satisfaction of consuming com- 
modities, the process might continue indefinitely, 
without reducing or afifecting in any way the aggre- 
gate employment of labor and capital. It would 
simply mean that a number of persons take their 
satisfaction in seeing new cotton mills rising and 
going to decay. 

"But it is conceivable that in the second year of 
over-saving, the savers instead of continuing to pay 
people to put up more mills might employ people to 
operate the excess of cotton mills, lending their 
money to buy raw material and to pay wages. Cot- 
ton goods which ex hypothesi can find no markets 
are thus accumulated. If the savers choose to take 
their pleasure in such a way, they might go on in- 
definitely without the aggregate of employment of 
capital or labor being affected. If they continue 
this impolicy for a twelvemonth, we should say that 
whereas in the first year they saved useless mills, in 
the second they saved useless cotton goods. In 
neither the first nor the second year is there any net 
increase or decrease of employment due to the new 
policy of saving. In fact, assuming sanity of in- 
dividual conduct, affairs would work out differently. 
Admitting an attempt to work the surplus mills, the 
actual over-production of goods could not proceed 
far. Let us assume savers to use, throughout, the 
agency of banks, which are to find investment for 



their savings. Suppose the banks, not realizing the 
mode of this new saving, have invested the first 
year's savings in superfluous cotton mills. These 
cotton mills or others in the next year cannot con- 
tinue to work without advances from banks, since 
they are unable to effect profitable sales. Soon 
after the beginning of the second year the banks re- 
fuse to make further efforts for over-production: 
markets being congested and prices falling, the de- 
mand for bank accommodation will grow, but banks 
will not be justified in making advances. Now the 
weaker mills must stop work, general short time 
follows, and the result is unemployment of labor 
and forms of capital. This is the first attempt to 
over-save upon employment. We have now for the 
first time a reduction of the aggregate of production. 
The result of reduced employment (under-produc- 
tion) will be a reduction of real incomes. This 
will tend to proceed until the reduced reward of 
saving (real interest) gradually restores the right 
proportion of saving to spending — a very slow and 
wasteful cure. 

"It thus appears that so long as saving can be 
vested in new forms of capital, whether these are 
socially useful or not, no net reduction of employ- 
ment is caused, the portion of income which is saved 
employs as much labor as, though not more than, 
that which is spent, but when the machinery of pro- 
duction is so glutted that attempted saving takes 
shape in the massing of loanable capital unable to find 
investment, the net production and the net employ- 
ment of labor in the community is smaller than it 



would have been had saving been confined to the 
minimum required by the needs of the society. 

"From the standpoint of employment the injury 
done by over-saving is thus seen to consist not in the 
over-production of plant or goods but in the condi- 
tion of under-production which follows the financial 
recognition of this glut. The real waste of power 
of capital and labor is measured by the period and 
the intensity of the under-production in which forms 
of capital and labor stand idle." ^ 

Over-production induced by over-saving is, of 
course, most widespread, as it is most striking, dur- 
ing an industrial crisis. But it may exist to a more 
limited extent during periods that are regarded as 
substantially normal. There may be an excess of 
productive instruments in the greater number, or 
even in all, of the industries of a country at all times 
except those of extraordinary prosperity. Some- 
thing very like this seems to have become true of the 
United States. Between 1886 and 1896 the average 
product of more than two thousand manufacturing 
establishments in Massachusetts was only fifty to 
seventy per cent, of their full capacity.^ It has been 
estimated that with their existing equipment of cap- 
ital and labor, the shoe factories of the country could 
meet the current annual consumption by running 

* "The Problem of the Unemployed," pp. 94-97. See also, 
"The Evolution of Modern Capitalism," ch. VII, by the same 
author. Professor Smart observes that this theory has not 
met with the attention that it deserves. Anyone who will 
carefully examine it cannot fail to be impressed with its super- 
ior value as an explanation of the phenomena that constitute 
an industrial depression. 

* Eleventh Report of the Annual Statistics of Manufactures, 
pp. 99-104, 169. 



steadily for four months. ^ In the absence of larger 
statistics, no precise estimate of the extent of the 
phenomenon can be attempted, but if everyday ob- 
servation may be relied upon the amount of produc- 
tive power that is unused is enormous. At every 
turn we seem to see efficient machinery abandoned or 
running on short time. And the cause is almost 
never a scarcity of labor. Now if the idle or par- 
tially idle capital-instruments were the worst of their 
kind, and if the new machinery invariably and im- 
mediately crowded out all the poorer instruments 
that were not needed to supply the current rate of 
consumption, the excessive accumulation of capital 
would cause neither over-production nor diminution 
of employment. The savings that might have been 
exchanged for consumption goods would have been 
expended in making machines that were allowed 
to perish as fast as newe^ machines adequate to the 
current demand were put in operation. Thus labor 
would be kept employed and excessive production 
restricted. But the industrial mechanism does not 
work so smoothly. The owners of the older instru- 
ments of production are not doing business on this 
lofty plane of philanthropy. They continue to pro- 
duce, and to compete for a share in a market that is 
beginning to be over-supplied. The directors of 
production see prices, and therefore profits, declining, 
and endeavor to recoup by lowering wages. Profits, 
however, continue to diminish until some of the in- 
dustries are closed, others are running only a part 

* Final Report of Industrial Commission, p. 752. 


of the time, unemployment has increased, and wages 
are further reduced. 

This theory is at variance, obviously, with one of 
the common-places of the older political economy. 
We have been assured very frequently that general 
over-production is an absurdity, since a supply of 
goods always means a demand for goods, and since 
the wants of men are never fully satisfied. Undoubt- 
edly the existence of goods implies the power to pur- 
chase other goods, and the existence of unsatisfied 
wants means a desire to purchase ; but what Adam 
Smith called "effective demand," the only kind of 
demand that will take the surplus goods off the 
market, requires that the purchasing power and the 
desire exist in the same persons. As things are, 
those who can consume more have not the desire, 
and those who have the desire have not the power. 
And there is assuredly nothing in the nature of our 
industrial mechanism to prevent this condition, which 
is obviously possible in one or two lines of produc- 
tion, from being realized in all. This failure of pro- 
duction and consumption to function harmoniously 
in the economic organism seems to have escaped the 
notice of so able a writer as Professor Clark, when 
he wrote: "The richer the world is in capital, the 
richer the worker is in productive power." ^ Richer 
in productive pozvcr, yes ; but what if the condition 
of consumption, the actual demand for products 
does not call for the full exercise of this power ? The 
very excess of productive power relatively to the 
needs that are combined with purchasing power, 

*"The Distribution of Wealth," p. 172, note. 


means an excess of supply of labor, which in turn 
means unemployment and low wages. 

The three forces of combination, rapid introduc- 
tion of new forms of machinery, and excessive mul- 
tiplication of existing forms, seem likely to continue 
operative for a long time to come. In a general 
way they are mutually helpful in their detrimental 
effects on labor. The powerful and highly organ- 
ized industrial combinations are able to put in new 
forms of machinery on a more extended scale than 
would be possible in a regime of small industries. 
It is true that these combinations will check ovei - 
supply of capital in the fields in which they are 
supreme, but in so doing they limit the opportunities 
of new capital. Outside of the province dominated 
by the great industries, therefore, the danger of a 
too abundant supply of capital instruments is in- 
creased ; it has gained in intension what it has lost in 

To sum up, sufficient data have been presented to 
justify the conclusion that the proportion of adult 
male wage earners (outside of agriculture, where 
the remuneration is much lower but the cost of living 
not so high) obtaining less than $600 per year, 
is at least sixty per cent. A partial confirmation 
of this estimate is seen in Mr. Robert Hunter's cal- 
culation that, "not less than 10,000,000 persons in the 
United States are in poverty" ; that is, "they may be 
able to get a bare sustenance, but they are not able 
to obtain those necessities which will permit them 
to maintain a state of physical efficiency." ^ Ex- 

"Poverty," pp. 60 and 5. 



plaining "physical efficiency," he says : "No one will 
fail to realize how low such a standard is. It does 
not necessarily include any of the intellectual, 
aesthetic, or social necessities ; it is a purely physical 
standard, dividing those who are in poverty from 
those who may be said to be out of it." ^ Allowing 
one male adult to every five persons, we see that 
Mr. Hunter's estimate is equivalent to the statement 
that two million men in the United States do not get 
a wage sufficient to supply their normal physical 
wants. They are on a physical level below that of a 
well kept horse or cow. This condition alone makes 
il altogether probable that sixty per cent, of the adult 
male wage earners among the 13,113,590 males 
above sixteen years engaged in gainful occupations 
other than agricultural and professional, receive less 
than $600 annually. As to the prospects of the 
underpaid, wages have increased less rapidly dur- 
ing the last quarter of a century — the period of 
our greatest industrial improvements — than during 
the previous thirty years. Whence the inference 
seems valid, that side by side with the progress of 
production there have existed forces which have 
prevented the laborer from obtaining his full share 
of the results of that progress. Three of these forc- 
es, namely, monopolistic combinations, rapid dis- 
placement of labor by machinery, and excessive 
multiplication of the instruments of production, will 
in all probability be with us for many years yet, in- 
creasing the rate of unemployment and restricting 
the upward movement of wages. From these evils 

^ Idem, p. 7. 



the poorest paid, being the least able either to resist 
a reduction or to utilize the possibilities of a rise in 
their remuneration, will naturally be the greatest 

u 177 


Our Industrial Resources and a Living Wage 
For All 

The national income may be regarded as a sum of prod- 
ucts or as the total of personal incomes. In the first sense 
it cannot be satisfactorily estimated. From an estimate 
in the second sense no definite conclusion can be drawn 
concerning the amount of income per family that would 
result from an equal distribution. The consequences of a 
better utilization of the nation's industrial resources: (a) 
an immense increase in the national product on account 
of the increased productivity of those who are now under- 
paid: (b) a very considerable increase from the abolition 
of luxury; (c) a sufficient increase to make possible a 
decent livelihood for all from the employment of idle 
labor and capital. 

The fact that so large a proportion of the laborers 
of America fail to get a Living Wage naturally 
raises the question, whether this condition is not in 
some measure due to the insufficiency of our resourc 
es of production? If the facts call for an affirmative 
answer it cannot be maintained that all the laborers 
of America have a present, actual right to a Living 
Wage. There are no rights to conditions or actions 
that are impossible of realization. Let us first 
examine whether the present national income would 
afford a universal Living- Wage if it were equally 


distributed, and then whether our productive capaci- 
ties, actual and possible, are adequate to this end. 

The national income, that is, the aggregate of util- 
ities put at the disposal of the inhabitants of the 
nation in the course of the year, may be conceived 
of and described in two ways : either as the total 
amount of goods and services made available, or as 
the sum of all the incomes received by the owners 
of the instruments of production, the makers of 
the products, and the performers of personal ser- 
vices. In the first sense, the national income 
comprises the sum total of food, clothing, hous- 
ing, fuel, lighting, and material goods generally, 
and all immaterial services, such as, the advice 
given by the lawyer, the instruction furnished 
by the teacher and the clergyman, the entertainment 
afforded by the actor, the tasks performed by the 
domestic servant, etc., — that are annually produced 
and made available for the satisfaction of human 
wants. Now if we could estimate this total of goods 
and services in some comprehensive way and express 
it by some common term, we should be in a position 
to answer the first of the questions proposed above. 
As this condition is obviously impossible, owing to 
lack of statistical data and the inherent difficulties of 
the problem, we turn to the second measure of the 
national income. We ask, how much money have 
the capitalists, landowners, laborers, entrepreneurs, 
professional men, domestic servants, and the rest, re- 
ceived during the year for the part that they have tak- 
en in producing or rendering available all these goods 
and services ? Instead of measuring the latter direct- 



ly, we get an indirect measure in the money that has 
been paid for producing them. Nor is the sum of 
individual incomes an excessive measure of the na- 
tional product. It is, indeed, greater than the value 
of the material product, inasmuch as the sums re- 
ceived for making the latter are frequently duplicated 
and sometimes tripled in the income calculation. 
A part of the net profit obtained by the manufac- 
turer, for example, is paid out to domestic servants, 
and thus figures twice in the summary of personal 
incomes. It must be kept in mind, however, that the 
national product, national income, the annual sum 
of utilities put at the nation's disposal, consists not 
merely of material goods, but of material goods plus 
immaterial personal services. The services rendered 
by the physician, the barber, the coachman, or the 
cook, are as truly utilities, are as much a part of the 
good things that are annually made available for the 
use and comfort of the people, as are wheat, iron or 
cotton. They must consequently find a place in any 
calculation of the nation's total income or product. 

What is the present national income of terms of 
personal incomes? Anything like a definite answer 
is impossible, but Dr. Spahr's estimate will furnish 
a basis for a rough guess, and, moreover, will serve 
to show the unimportance of the question as far as 
concerns the purpose of this chapter. According 
to his computation, the total amount obtained by all 
classes of income-receivers in 1890 was $10,800,000,- 
000.^ This divided equally among the 12,500,000 
families then in the country (reckoning five persons 

^"Present Distribution of Wealth in the United States," 
pp. 104, 105. 



to a family) would have provided each with an 
annual income of $864, — a very liberal Living 
Wage. Unfortunately, however, the problem is not 
one of simple division ; for the national income does 
not exist as a lump sum, and is not distributed all at 
once. It is divided among the producers according 
as it is produced, and this method of distribution 
determines the direction of the productive forces 
and the amount of the product. ^ An equal division 
of the national income among all the income receiv- 
ers in 1890 would necessarily have been made with- 
in a few days, or at most a few weeks, of the time 
when the goods and services were produced. As a 
consequence, the demand for products would have 
been other than it actually was during that year. 
Since workers of every description would have been 
in receipt of comfortable but not large incomes, the 
demand for luxuries would have been considerably 
less, and the demand for necessaries and comforts 
immensely greater. Hence the amount and kind of 
products brought into existence in response to this 
different demand would have been other than they 
really were, and there is a probability equivalent to 
a certainty that the sum total of incomes received by 
the contributors to these products would have been 
either more or less than $io,8oo,cxx),ooo. The in- 
come per family would, therefore, have been repre- 
sented by some other figure than $864. Moreover, 
this sum would in all probability not have had the 

* Cf. Seager's review of Smart's "Distribution of Income" 
in the "Annals of the American Academy of Political and 
Social Science," vol. xvi, p. 140. 



same purchasing power that it had in the system of 
distribution that actually existed in 1890. 

The difficulties called up by this partial statement 
of the problem render any attempt to estimate the in- 
come that men would receive from an absolutely 
equal distribution, a waste of time. Let us, there- 
fore, abandon this line of inquiry, and ask ourselves 
whether the natural resources and productive forces 
of the country would, if fully utilized, provide all 
laborers and their families with the requisites of a 
decent livelihood. What, in the first place would 
be the probable effect of a Living Wage on the pro- 
ductive efficiency of those workers who are at pres- 
ent receiving less than that rate? 

According to the theory of "the economy of high 
wages," — at least, when stated in its extreme form — • 
every increase in the laborer's remuneration will be 
followed by a relatively larger increase in his pro- 
duct. The higher his wage, the more profitable will 
he be to his employer. If these assumptions were 
valid the possibility of a universal Living Wage 
would be abundantly proved, and the only practical 
task remaining would be to convince employers that 
the theory was sound. 

The evidence of Sir Thomas Brassey, founded 
mainly upon his own and his father's experience as 
railway builders in every quarter of the globe, tended 
to show that highly-paid labor is the cheapest in 
occupations requiring great muscular exertion. ^ 
Schulze-Gaevernitz, - Schoenhof ^ and Brentano * 

^ "Work and Wages." 
" "Der Grossbetrieb." 
' "The Economy of High Wages." 
•"Hours, Wages, and Production." 


maintain that the same principle holds g-ood in ma- 
chine industries. ^ The widest and most searching 
of the investigations upon which these authors base 
their conclusions was that made by Schulze-Gaever- 
nitz in the field of cotton manufacture. He found 
that in America, where wages are highest, the cost 
of producing a yard of cotton goods was lower than 
in any other country. On the other hand, Mr. Hob- 
son is of the opinion that, "while a rise of wages is 
nearly always attended by a rise of efficiency of labor 
and of the product, the proportion which the in- 
creased efficiency will bear to the rise of wage will 
differ in every employment." ^ 

The theory is of interest here only in so far as it 
applies to those laborers who are at present under- 
paid. If the receipt of a Living Wage by them 
would result in a corresponding increase in their 
productivity, the latter would, of course, be suffi- 
cient to provide the increased remuneration. Presi- 
dent Hadley seems to hold that no such universal 
augmenting of productive power would occur. 
Low-grade labor, he says, is the cheapest in some 
employments, but not in work requiring a great 
amount of physical strength. ^ If this view is cor- 
rect a large proportion of the underpaid, namely^ 
those engaged in exhausting muscular activity, 
would prove more profitable to their employers if 
they were paid a Living Wage ; but the workers in 
industries that involve not so much a large output 

^Cf. Walker, "The Wages Question," ch. III. 

'"The Evolution of Capitalism," p. 271. Chapter X of this 
work gives a concise presentation and a critical analysis of the 
theory under consideration. 

* "Economics," sees. 361-363. 


of physical energy, as the long-continued and mo- 
notonous exercise of a few muscles, for example, 
garment workers and machine tenders, would fail 
to "make" the increased compensation. Professol 
Marshall says that all consumption by the laborer 
within the limits of the necessaries for efficiency is 
"strictly productive consumption; any stinting of 
this consumption is not economical, but wasteful."* 
And his estimate of the necessaries for efficiency 
"comprises, as we saw in the last chapter but one, 
a decent livelihood for the laborer and his family. 
In view of the complicated nature of the problem, 
however, the only general conclusion that seems 
justifiable is that the payment of a Living Wage to 
the underpaid would be followed by an immense 
increase in the national product. ^ 

A second means of helping to make possible a 
Living Wage for all might be sought in the aboli- 
tion of expenditures for luxuries. According to 
Professor Marshall, "more than one-half of the con- 
sumption of the upper classes of society in England 
is wholly unnecessary." ^ The same is probably 
true of the wealthier classes in America. If the 
labor and capital now employed in producing the 
superfluities of life were utilized in adding to the 
stock of necessaries and comforts, the supply of the 

* "Principles of Economics," p. 123, ist ed, 

' Sidney and Beatrice Webb are firmly convinced that a 
universal Living Wage would be an economic and social gain 
to Great Britain, and they seem to have made a most careful 
and searching analysis of the whole matter. See the chapter 
on, "The Economic Characteristics of Trade Unionism," 
especially, pp. 715-739, in the first edition of "Industrial 

• Op. cit., p. 124. 



latter would be vastly increased. Professor 
Smart's illustration of the enormous amount of the 
nation's resources that may be diverted to the pro- 
duction of luxuries which will satisfy only a few per- 
sons, is so clear and striking that it is worth quoting 
in full: 

"Indeed, a small minority of the world's inhab- 
itants may take up all the increase in wealth, leav- 
ing the majority at the old level, or sinking them 
below that level. Plant a field with potatoes, and 
leave enough grass to pasture a cow, and the field 
will maintain a dozen farmers in sound, healthy life. 
But sow the field down in the finer vegetables, and 
plant gooseberry bushes on the pasture, and the 
field will now yield vegetables for perhaps half a 
dozen. Finally, suppose the field to be sown down 
in flowers, not only does it not support anybody, 
but it cannot support enough of flowers to satisfy a 
few rich people. By this it may be seen that a cer- 
tain amount of labor and capital may be devoted to 
maintaining an entire nation in plain but sound 
life. Or it may be so employed as to yield a high 
level of comfort to a good many, while keeping a 
majority at the twenty-shilling-a-week level. Or 
it may be laid out to supply the intellectual, spirit- 
ual, and aesthetic wants of a few, while the major- 
ity are on the twenty-shilling level, and a minority 
is at the starvation level. It is not true that the 
well being of society as a whole is secured by the 
accumulation of wealth and capital. The great 
majority may be very little the richer for it." ^ 

* "Studies in Economics," pp. 323, 324. 


The effect of transferring productive energies 
from the field of luxuries to that of necessaries and 
comforts, is touched upon only to show what might 
1)6 expected from that quarter in the event that re- 
course to it were necessary. In the present state 
of our industrial resources no such necessity exists. 
The material requisites of a decent livelihood for all 
could be provided without curtailing in the slightest 
the present production of superfluities. The prob- 
lem of the underpaid is not a problem of produc- 
tion at all, but of distribution. Indeed, so long as 
the existing extremes of distribution, personal in- 
comes, and individual purchasing powers obtain, 
it is better, from the purely economic viewpoint, 
that the present outlay for luxuries should be con- 
tinued, yes, increased, than that it should be con- 
verted into capital, and intensify the evils of over- 
production and unemployment. This phase of the 
problem seems to escape entirely the notice of those 
superficial writers who condemn luxury chiefly on 
the ground that it is a waste of wealth that might 
have gone to swell the fund of productive capital. 
It is true that lavish expenditures for articles whose 
cost of production is out of all proportion to their 
real utility, and which minister only to vanity or 
still lower perversions of passion, constitute a grave 
moral and social evil ; but as long as consumption 
lags so far behind production, they are the lesser of 
two economic evils. 

The third and chief source from which the in- 
crease in the wages of the underpaid can be drawn, 
is the vast amount of productive power that is at 



present unutilized or only partially utilized. The 
question of the increased productivity of the under- 
paid themselves has already been discussed ; refer- 
ence here is to the unemployed workers and espec- 
ially to the material factors of production. No one 
M^ho is at all acquainted with the unused industrial 
resources of America, — the lands, mines, and fish- 
eries, the machinery that exists and that could read- 
ily be called into existence, the numbers of men that 
are nearly always unemployed in nearly every in- 
dustry, — can doubt for a moment that if all these 
were fully utilized in addition to the productive 
forces actually employed, the national product would 
be abundantly adequate to provide a decent liveli- 
hood for every man, woman, and child in the coun- 
try. The tendency of production to outrun con- 
sumption, which was spoken of in the last chapter, 
is in itself almost a sufficient proof of the proposition 
for which we are contending. One of the most 
striking indications of the tendency is to be found 
in the recent political phenomenon of "Imperialism." 
America has been drawn into a tremendous rivalry 
with the other great world powers for the possession 
of "spheres of influence" in the less developed 
regions of the earth. Only on the surface and in 
some of the means employed, is this contest politic- 
al ; fundamentally and in its final aim, it is economic, 
commercial. The activities of international politics 
are to a large and increasing extent busy with the 
problem of finding a foreign outlet for products and 
capital that cannot be consumed and employed at 
home. * 

*Cf. Reinsch, "World Politics," p. 31, sq. The following 


The possibilities that are bound up with an in- 
crease in the productivity of the underpaid, the 
aboHtion of luxury, and the full utilization of idle 
productive power of all kinds, prove as conclusively 
as any reasonable mind could ask, that the problem 
of the underpaid is wholly one of distribution. 
What Professor Smart says of England may be 
applied with emphasis to the United States: "The 
abolition of poverty is now within our reach if we, 
as a society, are really bent on its abolition. The 
resources of the nation in capital, invention, and 
labor are now so great that the one want of the 
time is organization, so that there shall be no mis- 
direction of production, no waste in consumption. 

sentences taken from John A. Hobson's "Imperialism," ch. VI, 
suggest what seems to be the only adequate explanation of 
the attitude of America toward the imperialistic movement. 
They were written in 1901. "The spirit of adventure, the 
American 'mission of civilization,' are, as forces making for 
Imperialism, clearly subordinate to the driving force of the 
economic factor. The dramatic character of the change is 
due to the unprecedented rapidity of the industrial revolution 
in the United States during the last two decades. During that 
period the United States, with her unrivalled natural resources, 
her immense resources of skilled and unskilled labor, and her 
genius for invention and organization, has developed the best 
equipped and most productive manufacturing economy the 

world has yet seen The power of production has far 

outstripped the actual rate of consumption It is suffi- 
cient to point out that the manufacturing power of a country 
like the United States may grow so fast as to exceed the de- 
mands of the home market. No one acquainted with trade will 
deny a fact which all American economists assert, that this is 
the condition which the United States has reached within the 
last few years, so far as the more developed industries aie 

concerned It is this sudden demand for foreign markets 

for manufactures and for investments which is avowedly re- 
sponsible for the adoption of Imperialism as a political policy 
and practice by the Republican party to which the great indus- 
trial and financial chiefs belong, and which belongs to them." 



no friction from the currency." ^ So far as produc- 
tive resources are concerned, modern life is not, as 
Malthus supposes, a lottery in which "some unhappy 
persons have drawn a blank." ^ There remains, 
then, the problem of distribution. The discussion 
of that phase of the problem which has to do with 
the obligations of the different economic classes to 
provide the laborer with a Living Wage, will be the 
burden of the remaining chapters of this volume. 

1 "Studies in Economics," p. 330. 

2 "Population," vol. ii, p. 34, London, 1826. 



The Forces That Regulate Price 

The obligation of providing the laborer with a Living 
Wage is conditioned by the forces controlling the present 
distributive system. All the factors of production are paid 
for out of the price of the product. The latter is deter- 
mined immediately by the quantative relations between 
supply and demand, remotely by natural resources, ex- 
penses of production, the desires of the buyers, and the 
purchasing power of the buyers. Incorrectness of the 
Socialist theory of value. 

The obligation correlative to the right to a Living 
Wage falls upon "the members of the industrial 
community in which the laborer lives." After the 
laborer himself, they are the immediate and the 
principal beneficiaries of his exertion ; and they are 
chiefly responsible for his success or failure in real- 
izing his fundamental right of access on reasonable 
terms to as much of the common heritage of mate- 
rial things as will enable him to live a decent life. 
Only to a secondary extent are the members of oth- 
er industrial communities gainers by his toil or de- 
termining factors in the matter of his industrial 
opportunities. Besides, they are burdened with re- 
sponsibilities of their own toward the laborers with 
whom they are in immediate relations. What, then, 


is the concrete meaning of the phrase, "the members 
of the industrial community in which the laborer 
lives"? A negative answer may be given at once: 
it does not chiefly refer to the community as a politic- 
al entity. The duty of paying all laborers a Living 
Wage does not rest primarily on the State, or on 
any provincial or municipal subdivision of it. The 
present economic system is not an institution or a 
department of the State ; it is shaped, controlled and 
maintained by individuals. Upon individuals or 
classes of individuals, therefore, rests immediately 
and chiefly the responsibility of directing the system 
along the lines of justice. In order to know the 
class or classes of individuals that are charged with 
the obligation in question, and the degree in which 
it is shared by each class, we shall find it profitable, 
necessary in fact, to make a brief review of the 
present distributive process. 

The national product is divided among the factors 
of production in the following manner: One share 
goes to the laborers, or wage earners, in the form 
of wages ; another, to the organizer, director, under- 
taker, of a business, in other words, the employer of 
the laborers, and is known as profits ; a third portion 
is taken by the owner of capital as interest ; a fourth 
share is paid to the landowner under the name of 
economic rent. Other classifications of the factors 
of production and their rewards are preferred by 
some writers, but the one here given is the most 
common, and seems to be the most convenient. Two 
or more of these productive functions may be dis- 
charged by the same person, as, in the case of the 


manufacturer who directs the operation of a factory 
with his own capital on his own land. Such a per- 
son is at once employer, capitalist, and landlord, 
and receives the three appropriate shares of the 
product. Even here the several shares can be 
reckoned separately. 

Now the product of an industry, or of all the in- 
dustries of the nation, is not distributed among the 
various productive contributors in its material forn). 
The men who furnish the labor, and directive abil- 
ity, and capital, and land for running a shoe factory 
are not paid for their services in shoes. What they 
receive is a certain proportion of the price for which 
the shoes are sold. The same is true of all other 
industries, extractive, agricultural, manufacturing, 
transport, or trade. Hence the total price, or value 
— for price is only the concrete money form of social 
value — of the product determines the total amount 
that will be distributed among the owners of the 
various factors of production. 

The total price obtained for the product of any 
industry during a period of time depends upon the 
selling price of the separate units of product. In 
other words, it is determined by the market price. 
And the market price depends upon the conditions 
of supply and demand. No doubt, it would be more 
scientific to say that the market price is fixed by 
the "subjective valuation of the two Marginal 
Pairs," or, by "the valuation of the Least Capable 
Buyer." Since, however, we have the assurance of 
Boehm-Bawerk himself that, "the law of price may 
be correctly, though less expressively and less un- 



ambiguously, formulated in terms of supply and 
demand," our present aim will be better realized 
through the medium of the older and simpler phrase- 
ology. There is no objection, says the author just 
mentioned, "to treating the theory of price under the 
good old catchwords. Supply and Demand, if care 
is only taken to avoid the errors and misunderstand- 
ings which so plentifully surround them, and to in- 
form the old forms and formulae with new and 
clear knowledge." ^ To guard against error and 
misunderstanding, therefore, let us define supply as. 
the amount of a commodity that is or will be offered 
for sale at a given price; and demand, as the amount 
that buyers are able and willing to take at a given 

Market price, therefore, is always determined by 
the quantative relation existing between supply and 
demand, that is, by the relation which the amount 
offered at a price bears to the amount that buyers 
are willing to take at that price. In any market 
the quantity of goods to be had will vary directly 
with the price demanded ; sellers will be ready to 
proffer more at a high price than at a low price. On 
the other hand, the amount that will be demanded 
will vary inversely with the price offered; buyers 

* "Positive Theory of Capital," pp. 214, 215. For a tech- 
nical and scientific treatment of the subject of value, see : 
Smart's "Introduction to the Theory of Value" ; Wieser's 
"Natural Value" ; Boehm-Bawerk's "Positive Theory of Cap- 
ital," Books III and IV ; Macfarlane's "Value and Distribu- 
tion," Part I ; Carver's "Distribution of Wealth," ch. I ; and 
Hobson's "Economics of Distribution," ch. Ill, which contains 
a brief but effective criticism of the excessive emphasis put 
upon the element of utility by the writers of the "Austrian 

13 193 


will take more at a low price than at a high price. 
Out of the differences that exist between the quan- 
tities offered at various prices on the one side, and 
the quantities asked for at those prices on the other, 
the actual market price emerges as a sort of result- 
ant. When the amount offered at a given price is 
great relatively to the amount asked for at that 
price, the resulting market price will be lower than 
when the amount offered at any price is small rela- 
tively to the amount desired at the same price. The 
market price will always be at that point at which 
the quantity offered is equal to the amount desired; 
or, where supply and demand are equal. 

While the statement just made is necessarily in- 
definite and not entirely satisfactory, it is not a 
mere identical proposition. It tells us by implication 
that different amounts are offered or are available 
at different prices, that different amounts are de- 
sired at different prices, and that the market price 
cannot be any of these except one at which the 
amounts offered and demanded are equal. And it 
is quite as exprtssive as the more technical formula 
that market price will be at or about the valuation 
of that one among the actual buyers whose valua- 
tion is lowest. It suggests, moreover, a sufficient 
notion of the causes that bring about changes in 
price. These are either immediate or remote. The 
immediate cause of a change in price is a change in 
the quantative relation between supply and demand. 
When supply decreases relatively to demand or when 
demand increases relatively to supply, prices will 
rise; when supply increases relatively to demand or 


when demand decreases relatively to supply, prices 
will fall. Thus a change in price may be effected 
by forces acting either from the side of supply or 
from the side of demand. Supply remaining the 
same, a change in demand will produce a change in 
price ; demand continuing constant, price will change 
through a change in supply. 

It has been contended that, since price change is 
a process rather than a static fact, supply and de- 
mand should not be considered as stationary 
amounts but as flows. The movement of goods in 
a market is best represented as a continuous inflow 
and outflow, and the operations of supply and de- 
mand as varying rate of such movement. "Where 
goods flow out of a stock at the same pace as they 
flow in, the price remains firm and demand and sup- 
ply will be said to be equilibrated ; where the inflow 
is faster than the outflow, prices fall and supply will 
be said to exceed demand; where the outflow is 
faster prices rise, and demand exceeds supply. ^ 

The remote causes of a change in price are: on 
the side of supply, a change in the condition of nat- 
ural resources or in the expenses of production; 
on the side of demand, a change in the desires or 
in the purchasing power of the buyers. In the mat- 
ter of coal, for example, the exhaustion of certain 
fields, or a rise in wages or profits, will cause a rise 
in price, while changes in the opposite direction will 
bring about a fall. This statement assumes, of 
course, that there has been no proportionate increase 
in demand. On the other hand, with no correspond- 

* Hobson, "The Economics of Distribution," p. 60. 


ing increase in supply, an increased desire for coal 
in those whose purchasing power is ample, or an 
increase in the purchasing power of those whose 
desire has heretofore exceeded their purchasing 
power, will produce a rise, just as changes that 
point the other way will produce a fall in price. Two 
or more of these forces may operate simultaneously, 
either assisting or counteracting one another. ^ 

From this brief review of the forces that deter- 
mine price, we can readily perceive the unsoundness 
of the theory of value defended by the founders of 
socialism. According to Karl Marx, the value of 
goods is determined and created solely by labor, is, 
in fact, merely the quantity of labor they embody. ^ 
More precisely, the value of any commodity is de- 
termined by the average labor time required to pro- 
duce it in a given condition of industry. If one 
coat has as great a value as two pairs of shoes, the 
explanation is to be found in the fact that the 
average coat maker — not any particular individual 
— needs twice the time to turn out one coat that 
the average shoe maker takes to produce one pair 
of shoes. Value, therefore, is something inherent 
in goods, put there solely by the laborer. 

Now labor is neither the sole determinant of value 
nor sufficient of itself to produce value. One of 
the most obvious facts of the market is that com- 
modities change in value while the labor contained in 
them remains unchanged. The amount of labor 
expended on the millinery "creations" that were in 

* Cf . Hobson, op. cit., 81-84. 

• See "Capital," Part I, ch. I. 



vogue last year is in them still, but they no longer 
have the same value or sell at the old price. Again, 
new and fertile land has value, although it has not 
cost labor. Marx attempts to meet cases of this 
kind by saying that such commodities have a price 
but no value, but, since he admits that price is only 
"the money form of value," he escapes the difficulty 
at the cost of self-contradiction. At any rate, if 
value in the Socialist theory be not equivalent to 
price it has no bearing on the present discussion ; 
for the problem of distribution is primarily con- 
cerned with the price of things, their market price. 
On the other hand, labor cannot of itself produce 
value. Men may expend indefinite quantities of 
labor on commodities, yet if the latter are not wanted 
by someone they will have no value and bring no 
price. No amount of labor embodied in wooden 
shoes will give them value to a community that will 
not wear wooden shoes. To objections of this na- 
ture Marx replies that in order to produce value 
the labor exerted must be socially useful, that is, 
they must have a certain utility for consumers ; but 
this is a virtual admission that labor is not the sole 
determinant of value. ^ 

The simple and obvious truth of the matter is that 
the value, or price, of goods is determined, caused, 
regulated, by the quantative relations between supply 
and demand, and that the determinant forces act 
from both sides. On the side of supply one of 
the determinants is labor, but it is not the only one, 

'A good analysis of Marx' theory of value and the contra- 
dictions into which he falls will be found in John Rae's ''Con- 
temporary Socialism," 2d ed., pp. 160-166. 



and even if it were it would not be all-important; 
for the forces implied in demand exercise an addi- 
tional and distinct influence. 

The total amount of money, therefore, that is 
available for division among the owners of the fac- 
tors of production — landlords, undertakers, capital- 
ists, and laborers — in any industry or in all indus- 
tries, is the total price that is received for the prod- 
uct. This in turn is determined immediately by 
the quantative relations existing between the supply 
of and the demand for the product, and remotely 
by the condition of natural resources and the ex- 
penses of production, on the one hand, and, on the 
other hand, by the desires and purchasing power of 
the buyers. Supply and demand are likewise the 
immediate determinants of the price that is paid 
for the use of any factor of production. In order 
to ascertain the possibilities of increasing the present 
price of underpaid labor, and the extent to which the 
employer and other industrial functionaries are able 
and obliged to convert these possibilities into reality, 
we shall make a brief examination of the remote 
forces that govern the rewards of each factor. A 
chapter will be devoted to each of the subjects of 
rent, profits, interest, and wages. 




The surplus produced by the better soils and locations 
is called rent. Examples of both kinds. The greater the 
difference between a better field and the poorest field in 
use, the higher will be the rent of the former. Rents will 
not increase with every actual extension of cultivation. 
Price determines rent, not vice versa. The rent of city 
locations is governed by the same laws as that of agricul- 
tural lands. Meaning of commercial rent. All economic 
rent tends to go to the owner of the land. 

In any agricultural region land varies both in 
fertility and in convenience to the market. As a 
consequence, equal expenditures of labor and capital 
on different fields do not produce equal net returns. 
The better grades of soil will yield larger crops than 
the poorer soils, and the fields nearer to the market 
will, owing to the smaller cost of marketing their 
product, yield a higher net profit than equally fertile 
fields that are not so well situated. Hence differ- 
ences in fertility and differences in situation rela- 
tively to the market will cause differences in the 
amounts received from the cultivation of land. 

Let us take an example of differences in fertility. 
An expediture of $ioo in capital and labor is 
applied to the cultivation of each of three fields 



with the result that the first produces 120, the sec- 
ond, no, and the third, 100 bushels of wheat. As- 
suming that the price of wheat is one dollar per 
bushel, and that the cost of marketing is included 
in the outlay of $100, it is seen that the product 
of the third soil just meets the expenses of produc- 
tion, while the second and first soils yield respect- 
ively ten and twenty bushels — or ten and twenty dol- 
lars — above the amount expended upon them and in 
excess of the return obtained from the third field. 
To this surplus is given the name of economic rent. 
With regard to lands differing in fertility, it may 
be defined as the difference between the product of 
any better land and the product of the poorest land 
that is put to the same use with the same expendi- 
ture of labor and capital. It represents, therefore, 
superior productivity of soil. 

In a precisely similar way, rents will arise in con- 
nection with lands that are variously situated with 
respect to the market. If three fields yield 120 
bushels of wheat each with expenses of cultivation 
of $100 each, and if the greater distance of the sec- 
ond and third fields from the market necessitates an 
additional expenditure of ten and twenty dollars 
respectively, it is clear that the first field will pro- 
duce a surplus of twenty dollars and the second a 
surplus of ten dollars. These amounts are rent, and 
represent not superior fertility but superior loca- 
tion. Hence a definition that would apply to both 
kinds of land differences might be framed in these 
terms: Rent is that surplus which is yielded by all 
the superior soils or locations above the poorest soil 


or location, devoted to a given use with a given ex- 
penditure of labor and capital. It may also be de- 
fined as, the excess yielded by land beyond the ex- 
penses of production, xA.s long as the poorest land 
returns nothing more than the expenses of produc- 
tion, one definition is equivalent to another; but as 
soon as it produces a surplus, the former definition 
ceases to express as much as the latter. 

Manifestly the greater the difference between the 
more fertile or better situated fields and the poorest 
fields in use, the higher will be their rent. Using 
the first of the two examples above given, and as- 
suming an increase in the demand for wheat that 
brings the price up to $1.25 per bushel, we see that 
$100 worth of capital and labor could now be applied 
to the cultivation of a field that would yield only 
eighty bushels. At $1.25 per bushel the crop would 
cover the expenses of production. But the three 
superior fields are still producing respectively 100, 
no, and 120 bushels, which, at $1.25 per bushel, 
means a surplus of $25, $37.50, and $50. Thus the 
third soil now pays a rent for the first time, while 
the rent of the second has been increased by $27.50, 
and that of the first by $30. As a matter of fact, 
the increase in rent will be greater than this if, ow- 
ing to the enhanced price of wheat, an additional 
amount of capital and labor expended on the better 
fields will produce a surplus in excess of the new 
outlay. If an additional expenditure of $25 will be 
followed by an addition of twenty-two bushels to 
the product, the rent of that field is increased by 
$2.50. Should the price of wheat rise sufficiently to 



make profitable the cultivation of a still poorer field, 
the differential advantages of the three better soils 
would be further augmented, and the fourth would 
yield a rent equal to its superiority over the new 
field. Therefore, the poorer the land that may 
profitably be cultiyated — the farther is extended the 
"margin of cultivation," — the greater will be the 
number of soils yielding rent, and the higher will be 
the rent from each. 

The rent of lands already in use will not, however, 
increase with every actual extension of cultivation. 
It would not be true to say, the greater the amount 
of land in use, the higher the rent of the better 
fields. The cultivation of new land will cause a 
rise in rent only when the new land is poorer, either 
in fertility or situation, than the old. This is not 
always the order in which successive increments of 
land are taken up. Owing to ignorance, inertia, or 
want of opportunity on the part of the cultivators, 
some of the better lands are often brought into use 
long after those that are less profitable. The effect 
of this process is to reduce instead of raising the 
rents of the older lands. The extension of cultiva- 
tion to lands that are better than some of those al- 
ready in use may be sufficient to increase the supply 
of produce, say, wheat, faster than the demand for 
it, and thus reduce its price. This means a reduc- 
tion in profits and in rents. 

An example is afforded by the movement of 
rents within the last half century in England and in 
our own Eastern States. The opening up of im- 
mense tracts of land in the West in conjunction with 



the improved facilities of transportation, has low- 
ered the price of farm products in the older regions, 
thus throwing the poorest lands out of cultivation and 
lowering rents. 

Since rent comes into existence only in conse- 
quence of a rise in the price of the product, it is in 
general not a determinant of price. The order of 
causality is : increase of demand for product ; rise in 
price of product ; extension of cultivation to poorer 
land ; appearance of rent on better lands. Strictly 
speaking, the last two phenomena are co-ordinate 
effects of increased price of the product ; for even 
in the absence of any poorer land, the fields already 
in use would now yield a surplus above the expenses 
of production. Though not a difi:erential gain as 
between one soil and another, this surplus is a dif- 
ferential relatively to costs, is due to land as dis- 
tinguished from the other factors, and usually ob- 
tains the name of rent. In a sense this absolute 
rent, which may arise both when all lands under 
cultivation are equally advantageous and when the 
poorest land yields a surplus, does determine the 
price of the product, inasmuch as the owners of 
such lands could, if they chose, transfer it to the 
consumers in the form of lower prices. In this sense 
price is likewise, within certain limits, determined by 
profits, interest and wages. Whatever view may be 
taken of the relation between the rent of the poorest 
land and price, there can be no question that the 
rent of all the better lands is not a cause of price but 
an effect. Price is not high because some lands pay 
a high rent, but some lands pay a high rent because 



price is high. That part of the necessary supply 
which is raised on the poorest land — the last portion 
of the supply — must bring a price sufficiently high 
to cover the expenses of producing it; those por- 
tions that come from all the better lands will sell at 
the same price. Hence the emergence of rent. 
Whether the rent is retained by the owners of the 
land, or handed over to the State, or destroyed, the 
price will remain the same; for it is determined by 
the relation between demand and supply. The in- 
crease in demand which precedes the appearance of 
rent or its increase, is caused by an increase in the 
purchasing power or in the desires of the consumers ; 
the failure of the supply to keep pace with the en- 
hanced demand is due to the scarcity of the better 
soils or locations. From the side of supply, there- 
fore, the last mentioned factor is fundamental in 
producing the rise in price, the extension of cultiva- 
tion to poorer lands, and the appearance and increase 
of rent. ^ 

* The assertion that rent does not determine price, or rather, 
that prices are not higher because of the existence of rent, 
assumes individual management of agriculture. If the State 
were to direct the cultivation and sell the products of all the 
lands in a community, with the present outlay for tilling and 
marketing, it could obviously reduce the price of the product to 
an extent equivalent to the present payments for rent. The 
expenses of production on all of the four fields referred to 
above were $400; the total product, 410 bushels of wheat; and 
the rent on all three of the better fields, $112.50. Under a 
system of unified management the whole crop could be sold for 
$400 instead of $512.50, or $0.97.5 instead of $1.25 per bushel. 
Still, the true cause of this difference in price is not rent but 
the private management of production, which requires that the 
common price be sufficiently high to cover the cost of produc- 
tion of the most expensive portion of the supply, and auto- 
matically leaves a surplus to the owners of the better lands. 
This point is made, not as an argument for collectivism — in 



The same general laws that govern agricultural 
rent apply to the rent of city lots and locations. All 
the better locations will produce a surplus above the 
return from an equal amount of capital and labor 
employed on the site whose situation is poorest. The 
expense of producing a given amount of goods will 
be less on some sites than on others, as in the case 
of a mill that has superior water-power facilities, 
or a jobbing establishment that is nearer to the rail- 
way station. Again, the volume of business done 
with a given expenditure of capital and labor will 
be different on different locations. If a clothing 
merchant in the center of a city can in one year 
make twice as many sales as a competitor who em- 
ploys the same quantity of capital and labor and 
sells at the same price on the outskirts of the city, 
he will obtain a surplus gain that will be due solely 
to his more profitable situation. Since the surplus 
represents the superior earning capacity of the bet- 
ter site, it is rent. 

Commercial rent, the rent of ordinary business 
language, is economic rent plus interest on the capi- 
tal invested in improvements. If a merchant pays 
$1,200 annually for the use of a building and lot, if 
the building is worth $10,000, and if the prevailing 
return from such investments is six per cent, only 
one-half of the $1,200 is economic rent. The other 
half is interest on the capital invested in the build- 

Under the present system of landholding, all eco- 

which the writer most emphatically does not believe. — but as an 
attempt at a complete statement of the relations between rent 
and price. 



nomic rent, even the surplus arising on the poorest 
soils or locations in use, will go or tend to go to the 
owners of the land. The tendency will invariably- 
become a reality when the owner of the land is also 
its cultivator or occupier. When the owner hires 
the use of the land to someone else he will usually 
get practically all the rent, at least in the long run. 
The cultivator of the 120-bushel wheat tract that 
we have already considered might for a time obtain 
the use of it for, say, $10 per year. With wheat 
selling at $1 per bushel and the cost of producing 
the crop only $100, he would, therefore, secure half 
the economic rent. Ordinarily, however, he could 
not long retain this advantage, as other cultivators 
would offer the owner a higher rent, or the latter 
would himself discover the advantage enjoyed by 
the present tenant. Sooner or later the owner 
would get substantially all the excess over the 
usual cost of production. The same law holds 
for locations in cities. ^ 

* For a more extended exposition of the theory of rent any 
standard manual of economics will be found satisfactory. A 
very thorough discussion of the subject in all its phases is 
contained in Walker's "Land and its Rent." Clark takes ex- 
ception to the prevailing statement of the relation of rent to 
price in his "Distribution of Wealth," ch. XXIII. 




Profits constitute the share of the undertaker. They 
tend, in the case of the majority of undertakers, to a com- 
mon and minimum level. This minimum determines 
the price of the product. Exceptionally large profits have 
no influence on price. The elimination of some of the ex- 
isting undertakers would result in a reduction of prices and 
of the total volume of profits. In the case of joint-stock 
companies profits do not arise as a distinct share of the 

In the strict sense the term profits denotes that 
share of the product that is taken by the owner of a 
business for his services as the director of its move- 
ments and the taker of its risks. Such a person is 
variously called the employer, the entrepreneur, the 
undertaker, the business man. His function in in- 
dustry is to estimate the public demand for goods, 
and to organize, direct and pay for the capital and 
labor required to meet the demand. Being the re- 
sponsible head of the business he controls, he does 
not look to someone else for his remuneration. This 
he must himself provide out of the gross profits of 
the undertaking, that is, out of that part of the 
product that remains after wages and salaries, inter- 
est on borrowed capital, commercial rent, and the 


cost of materials have been deducted. Out of this 
gross profit must come interest on his own capital 
used in the business, an allowance to replace the 
wear and tear of productive instruments, a certain 
amount for insurance against unfavorable years, and 
finally his personal reward for labor and for such 
risks of the business as are not covered by an insur- 
ance or reserve fund. 

The undertaker's share of the product of industry 
is evidently a variable one. Its size will depend up- 
on his ability to forecast the demand for his goods, 
and his success in putting the latter on the market 
at a minimum cost. The more accurately he can 
gauge the tastes and purchasing power of the public, 
and the lower he can reduce the outlay for capital 
and labor, the greater will be his net profits. How- 
ever, the rewards of the majority of business men, 
at least in undertakings of the same general kind 
and size, tend toward a common and minimum level. 
Those who possess exceptional ability, or who oc- 
cupy a favored position on account of established 
reputation, patents, government assistance, or some 
kind of monopoly advantage, will, of course, get 
more than this minimum. ^ 

As long as the goods produced by those under- 
takers who obtain the minimum amount of profits 

^ The theory even in a modified form of an equal rate of 
profits is criticized as inaccurate by Devas ; "Political Econ- 
omy," pp. 437-442, 2d ed. But after all due allowance is made 
for the presence of monopoly profits, the statement in the text 
still seems to be substantially correct. For a fuller treatment 
of profits the reader is referred to Marshall's "Principles of 
Economics," Hadley's "Economics," and Carver's "Distribution 
of Wealth." 



are a necessary portion of the supply, the price of 
the entire supply will be determined by this mini- 
mum. If the lowest paid class of business men can- 
not put a certain kind of goods on the market at a 
lower cost for capital and labor than ninety cents 
per unit of product, and if they will not accept less 
than ten cents as profit, the selling price of the goods 
must be one dollar. Any lower price would drive 
these men out of business and stop a necessary 
part of the supply. With supply thus curtailed, 
prices would again rise to the point required to at- 
tract their services. Hence the normal or minimum 
rate of profits is an essential part of the cost of 
production, and enters into the determination of the 
price of the product. 

Undertakers having exceptional ability or ex- 
ceptional opportunity will sell their goods at the 
common price, and therefore obtain exceptional 
profits. This surplus, sometimes called pure profit, 
is a differential gain, just as the rent of land is a 
differential gain. It is due to advantages, not of 
fertility or location, but of ability and opportunity. 
Like the rent of land, it does not influence price ; 
for it comes into existence as a consequence of the 
price that is required to cover the higher cost of 
production entailed by the other undertakers. 

From the fact that the price of goods must be 
sufficiently high to yield the minimum amount of 
profits to all those undertakers who furnish a neces- 
sary portion of the supply, it does not follow that 
none of the undertakers who at present contribute 
regularly to the product and obtain the normal rate 

14 209 


of profit could go out of the business without caus- 
ing a rise in price. Since all the existing under- 
takers are not turning out the full product of which 
they are capable, some of them, especially in the 
retail trades, could be dispensed with, while those 
who remained would be able to keep up and even 
increase the current supply. That the survivors 
would increase the total supply is practically certain, 
owing to the larger volume of individual profits 
that would be assured from a larger individual out- 
put. The final results would be a fall in price and 
a decrease in the size of the total share of industry 
obtained by undertakers in the form of profits. ^ 

Profits in the strict sense of a necessary return 
to one of the agents of production, arise only in con- 
nection with the private business or firm, as dis- 
tinguished from the joint-stock company or corpora- 
tion. In the latter the function of active direction 
is discharged by the officers and the board of direct- 
ors who receive fixed salaries, while the risks are 
assumed by the whole body of stockholders, and are 
provided for either by a reserve fund or in the form 
of a sufficiently high rate of dividend. Hence the 
product of these businesses is regularly divided into 
only three shares, namely, wages and salaries, inter- 
est, and rent. 

* Cf. Veblen, "The Theory of Business Enterprise," ch. III. 




Interest is the price paid to the capitalist for the use of 
the material instruments of production. It comes out of 
the product that these instruments help to create. But it is 
reckoned on the basis of capital-value. All capital tends 
to yield the same rate of interest. The rate is determined 
immediately by the relation of supply to demand, remotely 
by two factors on the side of supply and three on the side 
of demand. It is measured by the productivity of the least 
productive material capital that continues to be used and 
to attract investments. The relation between interest and 
wages : (a) when there is no change in the organization or 
in the methods of production; (b) when such changes take 

Interest is the share of the product of industry re- 
ceived by the capitahst. By the capitaHst is meant 
the man whose money is invested in the material in- 
struments of production: he may own the instru- 
ments himself, or he may have loaned his money to 
someone else who assumes the function of investor 
and owner. Fundamentally, therefore, interest is 
a return for, a price paid for, the use of material 
capital. For when a man borrows money and 
agrees to pay interest on it, his final motive is al- 
ways the utility that he expects to derive from the 
things that the borrowed money will enable him to 



obtain. These things may be either consumers' 
goods, such as food and clothing, or producers' 
goods, such as factories and railroads. In either 
case, the ultimate reason why he pays interest is to 
be sought not in the money that he has borrowed, 
but in the concrete utilities for which the money is 
exchanged. With the interest that is paid on loans 
for purposes of consumption we have no concern; 
we deal with interest only in so far as it is one of the 
shares of the product of industry. Hence the defi- 
nition of it as, the share received by the capitalist, 
or, the return for the use of the material instruments 
of production. 

The source of this interest is to be found in the 
product which is created through the agency of ma- 
terial capital. A plow manufacturer, for example, 
agrees to pay interest on money that he has bor- 
rowed and exchanged for machinery, because he 
knows that the plows which will thereby be produced 
will sell for a price that will enable him to pay in- 
terest in addition to all the other costs of produc- 
tion. The product that is turned out with the aid 
of machinery is so much larger than the product 
that would have come into being without it, that it 
covers wages, profits, rent, depreciation and inter- 
est. ^ If the owner of the business has invested some 
of his own money in its equipment he will likewise 

* A moderate statement of the productivity-theory of inter- 
est, and an effective criticism of Boehm-Bawerk's theory, will 
be found in Hobson's "Economics of Distribution," ch. IX. The 
statements contained in the text above are, however, consistent 
with either theory; for no explanation is attempted of the fact 
that the product will have a value sufficiently large to cover 



levy interest on the product, according to the amount 
of his investment. In this case he will retain the 
interest payment himself. 

Although interest is ultimately paid for the use of 
the material instruments of production and out of 
the product that is created through their agency, it 
is reckoned and measured in terms of percentage 
and value. The man who has equipped his busi- 
ness with borrowed capital does not pay a certain 
rent adjusted according to the number and kind of 
certain instruments, such as machinery, wagons, 
buildings, etc. On the money that he has borrowed, 
considered as a sum of value, say, $100,000, he an- 
nually pays a fraction of this amount, say, five per 
cent. He will measure in the same way the interest 
that he gets or desires to get on any money of his 
own that he has invested. To put the matter 
technically, the rate of interest is estimated not on 
capital-instruments, but on capital-value. 

Since interest is measured in this way, and since 
there is always new capital seeking investment, all 
portions of capital within a region in which active 
economic inter-communication exists are in competi- 
tion, and the tendency is toward one rate of interest. 
Those borrowers who conduct exceptionally prof- 
itable businesses can obtain money as cheaply as 
those whose enterprises yield smaller returns. 
Those who happen to be paying an unusually high 
rate will cease to do so as soon as the time of the 
existing loan expires. They will either compel their 
present creditors to reloan the money at the pre- 
vailing rate, or replace it with money borrowed from 


son^eone else. Tluj ability of new capital-value to 
displace that already invested prevents the latter 
from returning an exceptional rate of interest to the 
man who has loaned it, just as the presence of a 
second merchant in a market makes it impossible 
for the first to charge an arbitrary price for his 
wares. Even in the case of capital-instruments 
that have been purchased with the money of their 
owner, and that are yielding abnormally high re- 
turns, as, for example, the machinery in a very rich 
mine, — there is a sense in which the rate of interest 
is only normal. For the owner will capitalize the 
extra returns, and value his capital, not according 
to the amount of dollars invested, but in proportion 
to its actual earning power. If the interest return 
is equivalent to ten per cent, on his investment and 
if the prevailing rate is five per cent., he will reckon 
the business as worth twice the amount he put into 
it. And this will be its market or selling price. On 
this basis, therefore, the actual revenue will provide 
only the ordinary rate of interest. 

How is it, then, that capital brings different rates 
even in the same local market? Strictly speaking, 
those percentages by which the normal or prevailing 
rate is exceeded are not of the nature of true inter- 
est. They are either a compensation for the unusual 
risk involved in the loan, an extortion levied upon 
the ignorance or dire need of the borrower, or a 
monopoly tribute exacted on account of a tempo- 
rary stringency in the money market. When it is 
asserted that there is a common rate of interest, what 
is meant is that capital loaned in average conditions 


of security, knowledge, and bargaining power, yields 
approximately one rate of interest. 

The rate of interest, the price paid for the use of 
capital, is, like the price of any other economic good, 
proximately regulated by the quantative relations 
between supply and demand. Supply is made up of 
the different amounts of money that men are will- 
ing to lend at different rates ; demand of the various 
quantities that men will take at various rates. The 
actual rate is a resultant of this two-sided competi- 
tion, and must always be at that point at which sup- 
ply and demand are in equilibrium. A change in the 
rate can occur only in consequence of a previous 
change in the quantative relation of these immediate 
determinants. When the supply of capital increases 
faster than the concurrent demand, the rate of inter- 
est will fall, and vice versa. The remote, or ulti- 
mate, forces regulating the rate are chiefly : on the 
side of supply, the industrial resources of the com- 
munity, and the relative strength of its habits of 
spending and saving; on the side of demand, the 
productivity or perfection of existing capital-instru- 
ments, the comparative intensity of men's desires to 
lend their money for a small but secure gain and to 
invest it themselves for a larger but less certain re- 
turn, and the relative supply of land, business ability, 
and labor. A community that is rich in productive 
resources, natural or artificial, will evidently be 
able to create more capital than one that is poorer in 
these conditions, while a thrifty or parsimonious 
people will have more than a shiftless or extravagant 
one. On the other hand, when the existing forms 



of material capital turn out a large product in pro- 
portion to their cost, when the amount of capital 
owned by persons who prefer large risks and large 
gains to small risks and small gains is great, or when 
the supply of land, business ability, and labor is 
abundant relatively to the supply of capital, the de- 
mand for the latter will be greater than when the 
opposite conditions prevail. These assertions con- 
cerning the influence of the remote factors on the 
rate of interest assume, of course, that in each in- 
stance all the other conditions remain unchanged. 
The rate of interest may properly be compared 
with and stated in terms of each of the five remote 
factors, provided that the causal influence of the 
other four be not denied but merely assumed to con- 
tinue stable in the midst of the variations of the 
factor under discussion. In any such presentation 
of the matter the single factor is regarded, not as 
wholly determining, but as accurately measuring the 
level and movement of the rate. Of these compar- 
isons the most suggestive and fruitful relate to the 
productivity of capital-instruments and the supply 
of labor. Different businesses yield different rates 
of profit per unit of capital-value contained in them, 
but the poorest of them must, if they are to continue 
to attract investments, produce a return eqtiivalent 
to the prevailing rate of interest on loans. Material 
capital that fails to yield this minimum may, indeed, 
continue to be used, especially when it has been 
bought with money owned by the owner of the busi- 
ness, but it will not become the receptacle of new 
capital-value. In other words, concrete capital of 


this kind will not, generally speaking, be replaced 
or increased, and consequently will have no definite 
relation to the current rate of interest. But the 
productivity of, the percentage of profit returned 
by the least productive instruments into which capi- 
tal continues to flow, will fix, or measure, the re- 
muneration of all capital. Those portions of capital 
that are loaned to the users of instruments which 
have a higher productivity, will not command a high- 
er rate, any more than a pair of shoes sold to a rich 
man will fetch more than the market price. This 
class of borrowers can afford to pay more for 
loans than those who are putting money into the 
poorer instruments, but they need not and will not 
do so, as long as capital is freely and continuously 
offered and obtained at a lower rate in the same 

In order to estimate the effect of labor supply on 
the rate of interest, let us first take a situation in 
which labor and capital continue for sometime to be 
combined in the same forms, in the same manner, 
and in the same proportions. Labor is displaced 
neither by new types of machinery nor by improve- 
ments in the old types. All the conditions of the 
productive process are so stable that a given quan- 
tity of a given kind of goods is produced by precisely 
the same amounts of labor and capital that were re- 
quired five years ago. In these circumstances 
equal increases of labor and capital will not disturb 
the relation between their rates of remuneration. 
Wages will bear the same relation to interest after 
as before the change. Neither will gain relatively 



to the other ; for each addition to the supply of labor 
is balanced by an equal proportion of increase in the 
supply of capital, and, since there has been no change 
in the methods of production, the demand for both 
is affected in the same degree. It is not maintained 
that the owners would get the same proportion of the 
total product as formerly, for the shares of the 
undertaker or landowner might be augmented at the 
expense of the capitalist and the laborer; nor that 
the rates of wages and interest would remain the 
same numerically, — that, for example, the former 
rates of two dollars per day for labor and six per 
cent, per annum for capital would still be main- 
tained, — for they might suffer a change on account 
of a rise or fall in the price of products. A change 
of the latter kind would, however, affect wages and 
interest in equal proportions. 

When capital and labor do not increase in the 
same degree, the existing ratio between the rates of 
interest and of wages will be disturbed. If capital 
increases faster than labor, interest will fall relatively 
to wages, and vice versa. A decline in the rate of 
interest from six to five per cent, will not be ac- 
companied by a fall of wages from $2.00 to $1.66^. 
In fact, wages might rise above two dollars. What- 
ever the new wage-rate might be absolutely, it would 
be relatively higher than the new rate of interest. 
The laborer would have gained in comparison with 
the capitalist. Obviously these statements are 
merely a particular application of the law of supply 
and demand. When the price of wheat falls in 
consequence of an increase in supply, the decline is 


relative to the price of other goods. The vital fact 
is that the supply of other goods has not increased 
as rapidly as the supply of wheat. In like manner 
when the supply of capital increases at a more rapid 
rate than the labor supply, its price will fall relatively 
to the price of labor. Demand for labor is now 
larger than the demand for capital ; the extra amount 
of capital will, so to speak, run after labor ; competi- 
tion is less active among owners of labor than among 
owners of capital. ^ 

The analysis contained in the two preceding para- 
graphs assumes, as already stated, that no change 
takes place in the organization of industry or in the 
methods of production. The assumption evidently 
does not correspond with actual conditions. Under 
our regime of large-scale production, the organiza- 
tion of the productive factors suffers continuous 
modification. The new forms in which labor and 
capital are combined effect a saving in the amount 
of each that is required to make a given amount of 
product. When a number of independent estab- 
lishments are consolidated a considerable portion of 
the former labor force is rendered unnecessary, 
while the poorer factories can be closed and the 
better ones operated at their full capacity. Assum- 
ing that the total price received for the product re- 
mains what it was before, the result will be an in- 

^ Cf. Sidgwick, "Principles of Political Economy," vol. i, p. 
347 ; Clark, "The Distribution of Wealth," chs. XI and XII ; 
and Hobson, "The Economics of Distribution," ch. VI. The 
student of the general subject of interest may consult, in addi- 
tion to the volumes just mentioned, Boehm-Bawerk's "Capital 
and Interest," and "Positive Theory of Capital," and the 
works of Marshall, Hadley, and Carver cited in the last 



crease in the supply of labor and capital relatively 
to the demand for them, and a decrease in their re- 
muneration. Reference is to the whole amount of 
labor and capital in an economic community, and to 
what will happen in the long run. These unfavor- 
able changes in earnings will bear less harshly on 
that factor in which there has been less saving. If 
the proportion of capital that has been dispensed 
with is greater than that of labor — say, one-sixth in 
the former case and one-seventh in the latter — the 
advantage will be on the side of labor, and interest 
will fall relatively to wages. 

Such changes in the methods of production as the 
introduction of new forms of machinery and of im- 
provements in existing forms, will supplant labor 
by capital, and increase disproportionately the sup- 
ply of labor. As a matter of fact, capital is increas- 
ing much faster than labor, but the gain to the latter 
is not correspondingly large. ^ Some of the new 
capital is not merely competing with other capital 
for an opportunity to engage labor, but becomes a 
competitor with labor in operations that have hither- 
to been monopolized by the latter. In these opera- 
tions capital is no longer labor's auxiliary ; it is now 
labor's rival. For example, capital that under the 
old conditions would have gone into type and type- 
setters' cases is now embodied in typesetting ma- 
chines which take the place of men. The process 
of substitution, of which this is only one instance, 

^Between 1890 and 1900 the increase of capital in the 
manufacturing industries of the country was 51 per cent., that 
of labor only 25 per cent. ; but there was no corresponding fall 
of interest relatively to wages. Cf. "Final Report of the In- 
dustrial Commission," pp. 491-2. 


means an increase in the demand for capital relative- 
ly to the demand for labor, and consequently a 
tendency toward a high rate of interest relatively to 
the rate of wages. If the laborers that have been 
supplanted by the new machinery cannot readily 
find employment in other occupations, this tendency 
will become a reality. The increased amount of 
unemployment among laborers will offset to a great- 
er or less degree the advantage that comes to labor 
from a disproportionately rapid increase in the sup- 
ply of capital. While, therefore, capital is actually 
increasing faster than labor, a part of it is displacing 
labor, and the relative movements of interest and 
wages are determined on the one hand by the ex- 
tent of the displacement and on the other by the de- 
mand for the displaced labor in other departments 
of industry. 




Wages are a return for utilities created by labor. Since 
laborers are divided into non-competing groups, there is no 
common rate of wages. The three chief limitations of com- 
petition among the different groups. Wages in any group 
are determined immediately by supply and demand, re- 
motely by a number of distinct forces. They approximate 
the productivity of the least productive members of the 
group, that is, the value of the product of these members. 
The relation between wages and interest. The determin- 
ants of general wages. 

Wages denote the remuneration of the man who 
sells his labor to an employer at a certain rate per 
unit of time or per unit of product. The last clause 
points to the division of laborers into time workers 
and piece workers. The energy exerted by the 
laborer brings into being utilities, which are either 
immaterial, as the personal services rendered by the 
valet and the coachman, or material, as in the 
case of the weaver and the bricklayer. What is 
ultimately paid for in every instance is the utility 
that is created, rather than the energy that is ex- 
pended ; just as interest is paid for the utility that is 
derived from the use of the borrowed money, and not 
for the mere transfer of the money in the form of a 



loan. In the great majority of labor contracts the 
utility that the laborer creates or helps to create is 
re-sold by his employer; and the remuneration that 
he receives is simply his. share of the joint product 
to which he has contributed in conjunction with the 
other factors of production. His wage comes out 
of his product. Sometimes, however, the employer, 
instead of re-selling the utility created by his em- 
ployee, consumes it himself. In this case wages are 
derived from the employer's personal income, not 
from the product of the labor given in exchange for 
them. Examples will readily occur in many forms 
of domestic and professional service. Even this 
class is remunerated ultimately out of the total prod- 
uct of the nation's industry ; hence the truth of the 
general statement that wages are labor's portion of 
the national product. 

While the assertion that all capital tends to yield 
but one rate of interest is substantially correct, a 
similar affirmation concerning wages would be mis- 
leading, or rather, untrue. Competition among 
laborers is not nearly so immediate nor so extensive 
as among the owners of capital. Locomotive en- 
gineers have no fear of being displaced by "section- 
hands." The world of labor is divided into a series 
of "non-competing" groups which rise one above 
another, from the lowest grade of common labor to 
the highest form of special ability and skill. Within 
each group there is competition, more or less im- 
mediate and unlimited ; but among the various 
groups it is indirect in action and restricted in ex- 
tent. The latter kind of competition is maintained 


not so much by present members of the groups as 
by those about to become members. Aside from the 
difficulty of moving from a lower to a higher 
group, there is always a certain influence exerted 
by inertia and custom which tends to compel work- 
ers to continue at their present tasks. From this 
influence persons who have not yet entered any par- 
ticular occupation are, of course, free. Now groups 
that are relatively under-supplied, in which wages 
are consequently high, will naturally attract a great- 
er proportion of new members than groups that are 
overcrowded. And if all the persons who are regular- 
ly called upon to select an occupation were in a po- 
sition to exercise a perfectly free choice, the different 
groups would be in unlimited competition with one 
another in all but two respects, namely, relative 
attractiveness and relative cost of preparation to 
enter them. Thus occupations of equal attractive- 
ness would be supplied in inverse ratio to the cost of 
becoming fitted for them, while occupations stand- 
ing on the same level in the latter respect would be 
filled in accordance with their attractiveness. Since 
the more pleasant occupations are very frequently 
the ones entailing large costs of preparation, the two 
kinds of inequality would, to a considerable degree, 
balance each other. Labor would not flow into dis- 
agreeable occupations more rapidly than into the 
opposite kind unless the training cost of the latter 
were regarded as a greater evil than the unattract- 
iveness of the former. In the long run, therefore, 
competition among the different groups of laborers 
would be limited only by the net advantages or dis- 


advantages of cost of preparation as against dis- 
agreeableness of work. As a matter of fact, how- 
ever, the majority of those about to take up a life 
work cannot choose from the entire field, for they 
have not the financial resources required to make 
such a wide choice effective. Despite increased 
educational and other opportunities, the greater? 
number of the young in the lower walks of life are 
under the practical necessity of entering one of the 
lower groups of workers. Competition between the 
lower and higher groups is, therefore, less thorough 
than it would be if a larger proportion of the pro- 
spective workers were financially able to fit them- 
selves for the latter ; and the apportionment of new 
arrivals among the various groups is not made sole- 
ly on the basis of a balance between disagreeableness 
of work and cost of preparation. Taking the groups 
as a whole, we may say that competition among them 
is limited by unequal attractiveness, unequal training 
cost, and unequal opportunity of selection.^ 

It is to be noted that groups are distinguished 
from one another, not so much by differences of in- 
dustry or of kinds of work, as by differences of 
working power and skill. The group known as 
"common laborers" has representatives in almost 
every industry. Digging sewers is not the same 
kind of work as shoveling coal, yet diggers and 

^ The classic description of non-competing groups is that 
given by J. S. Cairnes in "Some Leading Principles of Political 
Economy," pp. 65-73. In addition to the three forces men- 
tioned above, which are peculiar to the world of labor, the gen- 
eral limitations of competition are, of course, operative with 
regard to the different groups of laborers. These are chiefly 
ignorance, inertia, immobility, benevolence, and monopoly, 

IS 225 


shovelers belong to the same group because each 
can do the work performed by the other. The 
group, therefore, is composed on the basis of similar- 
ity in the working efficiency of its members, — its 
members are interchangeable. 

The level, and movement, and laws of wages may 
be studied both in the single group and with refer- 
ence to the whole of the laboring class. Let us con- 
sider first the single group. Here, as in the case of 
all other commodities that are bought and sold 
under conditions of competition, the price is imme- 
diately regulated by the forces of supply and de- 
mand. The wages of any group of laborers will 
always be at that point at which the quantity of 
labor oflfered is equal to the quantity asked for. 
Conversely, at any existing rate of wages, supply and 
demand will be in equilibrium. The equilibrium 
will be disturbed, a change will take place in the 
rate of wages only in consequence of a change in 
the quantative relations of demand and supply. 
When the quantity of labor that is wanted at the 
current rate of wages increases faster than the sup- 
ply that is offered at this rate, the change will be 
upward; when the supply outruns demand there 
will be a variation in the opposite direction and wa- 
ges will fall. 

The remote forces, the ultimate causes, that de- 
termine the movement of supply and demand and 
the rate of wages, are many and complex. From 
the side of supply they are chiefly: the mobility of 
labor, that is, its power to move into or out of a 
group ; custom, the tendency of which in some occu- 


patlons is to continue long established rates of re- 
muneration in spite of changes in the labor supply; 
the standard of living of the laborers, which checks 
competition and counteracts the decline in wages 
that otherwise would follow an increase in supply ; 
the cost of subsistence and reproduction in the case 
of the members of the lowest paid groups; labor 
organizations, whose effect on supply is similar to 
that produced by established standards of living; 
the birth rate and the rate of immigration with 
reference to the potential supply of any group ; final- 
ly, the productivity of labor, that is, the size of the 
product turned out by the group with its actual 
equipment of implements and machinery. The 
principal demand-factors are: competition for labor 
among employers ; activity of production, or the gen- 
eral conditions of industrial prosperity; activity of 
consumption and the rate of saving, which are merely 
important elements in the last mentioned factor; 
and the supply of land, business ability, and capital 
relatively to labor supply. All of these factors are 
to some extent original causes of the rate of wages, 
and each of them is assisted and counteracted by 
one or more of the others. The actual wages of any 
group are a resultant of their inter-action. 

In the last chapter, the rate of interest was 
described in terms of the productivity of capital: 
the rate of wages may be advantageously compared 
with the productivity of labor, more precisely, with 
its marginal productivity. Let us assume that all 
the members of a group are equally productive, that 
they all contribute equal amounts to the making of 



their combined product. The disappearance of one 
from the group — the positions of the others remain- 
ing unchanged — would lessen the total pioduct in 
exactly the same degree as the disappearance of an- 
other. Since all are equally capable and perform 
equally important tasks, they will turn out products 
of equal value, and, assuming competition to be per- 
fect, will receive equal amounts of wages. Now it 
is evident that the sum of the wages paid to the 
group cannot exceed the value of the total product ; 
for the product is their source.^ If the margin be- 
tween the total wages of the group and the total 
value of its product is unusually wide, and if all the 
members of the group are fully employed the em- 
ployers will strive to increase their product by en- 
ticing laborers from one another. As a result of 
this competition for labor, wages will rise until the 
employers have only enough left to pay rent and m- 
terest, and obtain for themselves the minimum profit. 
In case all the members of the group are not fully 
employed, the employers will increase the total labor 
force and product, thus depressing the price of the 
latter and raising the remuneration of the former, 

^ The product is obviously not the source from which is 
drawn the remuneration of those groups whose product (per- 
sonal services) is consumed instead of being sold by the 
employer. Of this nature are some of the professional classes, 
for example, lawyers and physicians. There is, however, 
scarcely a single group of laborers — using the word group to 
comprise all who are interchangeable in working efficiency, and 
the word laborer in the ordinary sense — that is wholly of this 
kind. Practically all of them are composed partly, the major- 
ity of them dominantly, a large proportion wholly, of persons 
whose product is sold by their employer, in other words, of 
industrial workers. Hence it may be safely said that the 
wages of these groups are regulated by the product of the in- 
dustrial members of the group. 



until the unusual margin of profit disappears. Thus 
the total wages paid to the members of a group al- 
ways equals the selling price of the product, minus 
rent, interest, and normal profits ; and since all le- 
ceive the same remuneration and turn out the same 
amount of product, the wage of each may be said 
to be fixed by his productivity. 

Usually, however, all the members of a group do 
not produce equal quantities. While they are all 
equally capable, and in similar conditions would be 
equally productive, they are not all in a position fully 
to utilize their capabilities. Laborers under the di- 
rection of an incompetent employer, and those work- 
ing with poor tools or machinery, cannot turn out as 
large a product as their fellows of the same group 
who are more advantageously situated. Yet the 
amount of product that is dependent upon any man's 
presence, the amount that would not be in existence 
if he were removed, his "associated product," must 
have a value at least equal to the wage that he re- 
ceives. The laborer whose product does not provide 
his wage is not a profitable investment, and cannot, 
on business grounds, be retained. This principle 
applies to even the least productive members of a 

On the other hand, the wages received by any 
member of a group will not fall far below the value 
of the product of its least productive members ; for 
an employer will continue to add laborers to his force 
as long as the product resulting from their presence 
is sufficient to provide their remuneration. All the 
employers will pursue this course until the money 



return from the product that is associated with the 
activity of the least productive or least important 
laborers will approximate their wages. These are 
the "marginal" members of the group ; their produc- 
tive power is the group's "marginal" productivity; 
and the product dependent on their presence is the 
"marginal" product of the group, because they stand 
at the margin of profitable employment. Now the 
wages obtained by these men will fix the remunera- 
tion of all the other members of the group ; for they 
are all equally capable. What one man can do every 
other man can do. In the actual organization of 
industry some are, indeed, less productive than oth- 
ers, but this is because they are for the time being 
engaged in less important tasks, or are not so well 
provided with auxiliary capital. Any one of them 
could, if called upon, take the place of any one of the 
more productive workers. Consequently an em- 
ployer will pay the latter no more than the former. 
Thus the mobility of laborers of the same group has 
the same effect on their wages as the mobility of new 
capital on the rate of interest. Capital that is loaned 
for investment in highly productive instruments can 
command no higher interest than capital that goes 
into the least productive enterprises because other 
capital stands ready to take its place. Laborers 
engaged in highly productive tasks will get no higher 
wages than their equally capable fellows in the least 
productive employments because they can be readily 
displaced by the latter. 

Evidently this analysis assumes a perfection of 
competition that does not exist. On account of ig- 


norance, immobility, or failure to assert themselves, 
some members of the group are paid much less than 
the value of the group's marginal product. On the 
other hand, one employer will often pay higher 
wages than another, either through habit or for 
reasons of humanity or expediency, or because his 
employees are strongly organized, or owing to 
ignorance of the wages prevailing elsewhere in the 
same group. The assumption that every employer's 
business is of such a nature that he can increase the 
number of his laborers one by one and stop at the 
precise point where an additional man would be 
unprofitable, is likewise far from being universally 
valid. In a given establishment the least productive 
men may turn out a product that is worth consider- 
ably more than their wages, but the circumstances 
of the business may be such that no addition short 
of five men will be practicable. Now the product 
brought into being by the five may be less in value 
than the amount of wages that they must receive. 
In that case new men will not be employed, and the 
remuneration of the least productive laborers actu- 
ally at work will not approximate the selling price 
of their product. 

Nevertheless this presentation of the matter cor- 
rectly describes the tendency of wages. The re- 
muneration of all the members of a group of equally 
capable workers will tend to equal that of its least 
productive members, and the wages of the latter will 
tend to approximate the value of their product. 

The value, not the amount of the product, it must 
be noted, regulates wages. With the same expendi- 



tore of skill and energ>-. but aided by better tools of 
inachmen% the laborers of a group may turn out 
double the amount of their former product: yet if 
the price of the product has fallen in the meantime 
thcr will certainly not receive twice as much wages 
as when their product was only half its present size. 
And the value of the product is itself determined by 
the condition of supply and demand, which is in turn 
governed, as we have seen in a former chapter, by 
more remote forces. WTiile, therefore, the value of 
the product is a convenient measure of wages, it 
is not an ultimate determining factor. 

As seen in the last chapter, the relation between 
wages and interest is dependent on the relation be- 
tween the supply of labor and the supply of capital. 
Methods of production remaining the same, the 
wages of a group will rise relatively to interest when 
the capital supply of the group increases faster than 
the labor supply. WTien productive conditions 
change in such a way that labor is displaced by capi- 
tal, the more rapid increase of the latter will be 
partially or wholly neutralized, so that the gain of 
wages relatively to the rate of interest will be 
diminished or entirely prevented. 

So much for the determinants and measures of 
the wages of any group. Concerning wages in gen- 
eral, the sum total of remimeration obtained by all 
the groups within a period of time, it may be said 
that they are governed immediately by supply and 
demand, ultimately by the several remote forces 
that regulate group wages. To say that general 
wages are measured by the marginal productivity" of 


the least productive group of workers, would be 
obviously unmeaning, misleading and, indeed, un- 
true; but the assertion that the ratio between them 
and the rate of interest depends on the relation be- 
tween increase of labor and increase of capital con- 
veys an important truth. Perhaps the most fruitful 
single proposition that can be laid down is this: in 
any given conditions of production and consump- 
tion, wages, labor's share of the national product, 
will be determined by the ease or difficulty of in- 
creasing the supply of labor relatively to the supply 
of land, business ability, and capital.^ 

* Cf. Hobson, "Ihe Economics of Distribution," pp. 201-217. 
The subject of wages is ably treated in the works of Nicholson, 
Clark, Sidgwick, Marshall, Hadley, and Carver which have 
been cited in the chapters immediately preceding. See ?lso 
Walker, "The Wages' Question" ; Levasseur, "The American 
Workman" ; Gunton, "Wealth and Progress" ; and Smart, "The 
Distribution of Income." 







The Obligation of the Employer 

Restatement of some fundamental conclusions. The 
obligation of providing the laborer with a Living Wage 
falls upon the employer because of his economic position. 
Neither labor contracts nor the productivity of labor ars 
necessarily correct measures of justice. The employer who 
cannot pay a Living Wage is not bound to do so, but the 
laborer's right to a decent livelihood is superior to the em- 
ployer's right to enjoy goods that are superfluous to his 
social position. The employer is obliged to pay a Living 
Wage before he obtains interest on his invested capital. 
The productivity of capital and the sacrifice of saving are 
to some extent valid titles of interest, but they are inferior 
to the title of needs. A corporation is under obligation 
to pay a Living Wage at the expense of dividends. 

Three of the more important conckisions arrived 
at in preceding chapters may with advantage be re- 
stated. First, the laborer's right to a Living Wage 
is merely the concrete expression of the general 
right, which inheres in him as in all other men, to 
obtain on reasonable terms as much of the common 
bounty of nature as will enable him to live decently. 
Those who reject this general right are logically 
compelled to reject the intrinsic worth and sacred- 
ness of personality, to deny the reality of moral 
rights, and to maintain that the only determinants 



of property titles are the potency of physical force 
and the ordinances of the civil law. Those who 
admit the validity of the general right will logically 
conclude that in the laborer it becomes the right to 
a Living Wage because, in the present economic 
and political order, there is no other reasonable way 
by which it can obtain a concrete existence. Sec- 
ond, the corresponding obligation falls upon "the 
members of the industrial community in which the 
laborer lives," since they are the primary benefici- 
aries of the laborer's exertion and the only persons 
who can reasonably be expected to remunerate him. 
The members of other communities than that in 
which a given laborer lives have not the control over 
his product that would enable them to pay wages 
therefrom ; besides, they are under obligations toward 
their own neighbors who are wage earners. Any 
reasonable determination of the duties that have to 
do with the resources and opportunities of the earth 
will hold each community responsible for the realiza- 
tion of the wage-rights of its own members. Final- 
ly, the existing distributive system, which by means 
of certain psychical, economic, and social forces, 
apportions the national product among the owners 
of land, business ability, capital, and labor, deter- 
mines the particular classes of persons upon whom 
the obligation rests, and sets certain limits to their 
power to discharge it. 

Just as the obligation to provide particular labor- 
ers with a Living Wage holds in general against 
their own community, rather than other communi- 
ties ; so it binds specifically the employer, rather than 


other economic classes of his community. All class- 
es, landowners, employers, capitalists, and laborers, 
are obliged to refrain from unreasonably hindering 
the gaining of a decent livelihood by their fellow 
men; but the refusal of landowners and capitalists 
to pay a Living Wage to laborers who are not in 
their employ cannot fairly be regarded as an unrea- 
sonable hindrance. Since they do not own the 
laborer's product, they are not in control of the 
source from which, under the wage-system, labor is 
remunerated. But the economic position of the 
employer is such that the obligation falls naturally 
and reasonably upon his shoulders. In the case of 
industrial labor, he gets possession of and sells the 
product; in the case of personal services that are 
utilized solely by him, the obligation is still more 
clearly his, inasmuch as he is the only beneficiary of 
the laborer's exertions. To shift the wage-paying 
obligation, or any portion of it, to other classes would 
involve an essential change in the present industrial 
system. The distribution of duties that would be 
necessitated by vital changes does not concern us ; 
we are dealing with the obligations that arise out of 
the order now existing. Among all the economic 
classes of the community, therefore, the employer 
is primarily charged with the obligation of provid- 
ing the laborer with a Living Wage because this is a 
reasonable consequence of his position and function 
in the economic organism. His refusal to fulfil it 
can fairly be interpreted as an unreasonable inter- 
ference with the laborer's right to get a decent liv- 
ing from the resources of the earth. 



Another method of describing the employer's 
obligation turns upon the human dignity of the 
laborer as an essential element of the wage-contract. 
The employer is bound to compensate the human 
exertion that he buys at its ethical value. He should 
deal with it as the attribute, the output, of a person, 
of a rational creature who is endowed with an inde- 
structible right to live a decent human life. This 
aspect of the thing that he buys ought to receive 
explicit recognition in the contract ; that is, the con- 
tract should be made on such terms that the dignity 
of the laborer and his right to a decent livelihood 
will be safeguarded. 

According to a third view, the wage-paying func- 
tion is a social one, delegated by society to the em- 
ployer. Society, or the community, owes its labor 
members a Living Wage in return for their social 
services as workers, but it has transferred the obli- 
gation to a special agency. The distributive func- 
tion of the industrial organism has been specialized. 
True, society has not, either in its political or indus- 
trial capacity, explicitly commanded the employer to 
pay a Living Wage, but this negligence does not re- 
lease him from a duty that arises out of the very 
nature of the function that he has undertaken to 
perform. He accepts the task of social paymaster, 
and is morally bound to discharge it in accordance 
with the dictates of reason and justice. 

Finally, the employer's obligation may be stated 

in terms of social utility. As a social functionary 

he ought to perform his task in a manner consistent 

with social safety. Consequently, he is obliged to 



give his employees a wage that will enable them to 
live decently, to marry, and to bring up a family in 
conditions of reasonable comfort and security ; for 
when any considerable section of its members fails 
to reach this level, the security and the existence 
even of society is endangered. 

The last argument considers the worker's rights 
and interests as mere means to social well being. 
The second and third are fundamentally the same 
as the first, since they assume that the obligation to 
safeguard the laborer's right to a decent livelihood, 
and to discharge this one of society's responsibilities 
toward him, is a necessary corollary of the employ- 
er's economic position. The last word of the ethical 
argument, therefore, is the reasonableness of assign- 
ing the duty of providing the laborer with a Living 
Wage to the employer, rather than to any other 
economic or social agency. If it be objected that 
this principle is too indefinite, the answer must be, 
none of the recognized titles of ownership rests on 
a more definite or more urgent basis. What justi- 
fication exists for John Brown's claim to the land 
that he has been the first to occupy ? or has bought ? 
or inherited? or to the crop that he has produced 
therefrom ? And why should other men be denounced 
as unjust when they prevent him from enjoying 
these claims ? In other words, why are these morally 
legitimate titles of property ? No final answer can be 
given except that they are reasonable methods of 
distributing the common heritage of nature, of de- 
termining and concreting the general rights and ob- 
ligations of men with regard to the common bounty 

i6 241 


of the earth. Under the wage-system the payment 
of a Living Wage by the employer is an equally rea- 
sonable method of concreting the laborer's general 
right to a decent livelihood. And the obligation 
binding the employer to perform this function is 
just as reasonable and valid as the obligation which 
constrains men to respect the traditional titles of 

Men who deny that the employer is under this 
obligation may be comprised in two general classes : 
first, those who maintain that the terms of the labor 
contract constitute the sole measure of rights and 
duties ; and, second, those who assert that the labor- 
er's productivity determines his valid claims in the 
matter of wages. To the former contention we can 
only answer that every free contract is not necessar- 
ily just. An agreement to rob or kill for a price is 
legitimate neither in morals nor in law. The man 
who consents to pay blackmail rather than suffer 
injury to his reputation enters a free contract, yet 
the other party to the contract is guilty of an act of 
injustice. When a body of consumers is forced to 
pay an extortionate price for a monopolized com- 
modity, they are given the benefit of free contracts, 
which nevertheless all reasonable men pronounce 
unfair. Those in control of the monopoly are con- 
demned as unjust because they take an undue ad- 
vantage of the necessities of their fellows. Now the 
employer who makes use of the dire need of the 
laborer in order to force him into a wage-contract 
that is incompatible with reasonable living, commits 
precisely the same offense; for it cannot be main- 



tained that the laborer is free to reject the terms 
offered and get his Hving in some other way. No 
such alternative exists practically. Individual work- 
ingmen may change their abode and their employ- 
ment, but other individuals must take their place. 
The class remains. While the present industrial 
system exists every community must contain a body 
of laborers and a body of employers. And the mem- 
bers of both groups depend upon labor contracts for 
their livelihood. Hence, these contracts ought to 
be made in such a way that the natural rights of the 
participants to a decent living will be provided for 
and safeguarded. This is a moral limitation im- 
posed upon the wage-contract by the very nature 
of existing industrial institutions. 

The contention that the laborer ought to be re- 
warded according to his productivity, may mean 
three different things. Productivity may be inter- 
preted as the value of the product that comes into 
being as the result of the activity of any particular 
laborer; as the productive power of one worker 
relatively to that of another; or, as the productive 
importance of labor in comparison with the other 
factors of production. Let us examine each inter- 
pretation separately. 

If the value of the laborer's product be taken as 
the just measure of his remuneration, he ought to, 
as in fact he usually does, receive an increase of wa- 
ges when his product sells for a higher price. Yet he 
works no harder than before, turns out no more pro- 
duct than before. His additional compensation bears 
no relation whatever to any quality or achievement, 


physical or moral, of the laborer himself. Now a 
theory of justice that measures a man's desert, his 
rights, by conditions for which he is in no wise 
responsible, and which takes no account of his hu- 
man dignity, stands refuted as soon as it is stated. 
It may be a canon of expediency ; it is certainly noc 
a canon of justice. If, however, it be maintained 
that there is no obligation to pay the laborer more 
than the value of his product because there is no 
possibility of doing so, no objection can be offered; 
but this is merely a practical conclusion that would 
follow from any theory of industrial justice that 
might be adopted. It is consistent with the Living 
Wage principle, and with the assertion that the 
laborer ought not to be paid the value of his product. 
The argument from productivity in the second 
sense assumes that one man is paid more than an- 
other because he produces more, and contends that 
higher productive achievement is a valid reason for 
higher remuneration. But in most cases it is utter- 
ly impossible to measure the relative productivity of 
different classes of workers. Does the bookkeeper 
in the cotton factory produce more than the spinner ? 
Or the locomotive engineer more than the "section- 
hand ?" In the factory as on the railway, both class- 
es of workers are essential to the existence of the 
product, and their productive efforts have an organic 
character. One could not function successfully 
without the other, and there is no portion of the 
finished product to which both have not in some 
measure contributed. Each is in his own order a 
cause of the whole product. Consequently, no part 



of it can be set apart as the exclusive creation of 
either. We cannot say that the bookkeeper gets 
more than the spinner because he produces more, 
for we do not and cannot know whether the assump. 
tion be correct. The difficulty is the same when we 
consider laborers in different industries. Do the 
skilled workers in an automobile factory produce 
more than the common laborers who pave streets? 
There is no third term by which the two products 
can as such be compared. A basis of comparison 
might be found in their relative general utility to 
society, but this is not, strictly speaking, a test of 
productivity. Besides, it would dictate that the 
street laborers ought to receive higher wages than 
the automobile makers. The relative productivity 
of different workers can be ascertained only in those 
cases in which all the conditions of work are pre- 
cisely alike, when, for example, men use the same 
kind of tools or machines. We can readily com- 
pare the products of two coal-heavers who are 
equipped with shovels of the same size, or of two 
operators who use the same kind of sewing machine, 
or of two bricklayers who work in equally advan- 
tageous circumstances. When, however, the work- 
ing conditions vary, and especially when every por- 
tion of the product requires the activity of all the 
producers whom we wish to compare, we cannot tell 
to what extent one man is more productive than an- 
other. As a matter of fact, different kinds of labor 
are rewarded differently on account of differences 
in the conditions of supply and demand. Wqrt: 



bookkeepers as plentiful, relatively, as spinners 
their remuneration would be as low. 

The third interpretation of productivity as a meas- 
ure of industrial desert holds that labor, and conse- 
quently any particular group of laborers, is at present 
rewarded in conformity with its importance rela- 
tively to the other productive agents. The conten- 
tion is evidently true if "productive importance" be 
taken to mean relative scarcity in the actual circum- 
stances of industry, for this is only another way of 
saying that labor's share of the product is fixed by 
the laws of supply and demand. When, as usuallv 
happens, this phrase is employed to describe in some 
vague way the relation of causality existing between 
labor and the product, the theory is as impossible 
of verification as the less ambiguous assertion that 
labor is remunerated according to the portion of the 
product that it creates in conjunction with the other 
factors. As we cannot determine how much of the 
joint product is due to each factor, so we cannot 
measure their relative importance in the work of pro- 
duction. The productive importance of the employ- 
er is sometimes assumed to be indicated by the share 
of the product that he actually receives, but this in- 
ference from income to productivity is merely an 
ordinary instance of the logical fallacy known as 
"the vicious circle." ^ "What determines the em- 
ployer's remuneration?" "His productive impor- 
tance." "How can the latter be ascertained?" "By 
referring to his remuneration." Those who take 
the trouble to get behind formulas, and to examine 

*Cf. "The Social Problem," by John A. Hobson, p. 160. 


the actual working of industrial forces, realize that 
the income of any factor depends upon its "indis- 
pensableness" and not on any proportion to its pro- 
ductive efficiency. ^ When undertaking ability was 
less plentiful than it is now, employers in competitive 
enterprises received larger rewards ; therefore, their 
productive importance was either exceeded by their 
former profits or is at present inadequately remun- 
erated. Undoubtedly the employer is in most cases 
a more important productive factor than any single 
laborer, as is easily shown by comparing the respect- 
ive consequences of their withdrawal from an enter- 
prise. The productive importance of different em- 
ployers can likewise be partially measured by re- 
ferring to the different results that are obtained 
when they direct production with the same quantities 
and qualities of land, capital, and labor. But it is 
not possible to estimate the productive importance 
of any employer, efficient or inefficient, relatively to 
the productive importance of the entire labor force 
under his direction. Mr. Mallock has made an in- 
genious attempt to show that by far the greater part 
of the product of modern industry is due to mental 
ability (or simply Ability, as he writes it,) and that 
labor gets more instead of less than it produces ; but 
he cannot be said to have conspicuously succeeded. 
He ignores almost entirely the advances in skill made 
by labor during the last century, and the vast differ- 
ences of directive ability required and displayed in 
different industrial enterprises ; "ascribes" a certain 
portion of the product to labor, and says that labor 

^ Cf. Smart, "The Distribution of Income," pp. 237, 238. 


must be "held to produce so much," when the ques- 
tion, in so far as it has any ethical interest, is one 
of objective fact, not of practical expediency; and 
exaggerates the mental endowments of inventors, 
and does not sufficiently distinguish between their 
achievements and those of the employing class. ^ 

Even if the claim that labor is at present rewarded 
in proportion to its productivity — in any sense of 
which the term is susceptible — were irrefutably es- 
tablished, the conclusion that labor is justly remun- 
erated would not follow. "We might raise the ques- 
tion, whether a rule that gives to each man his prod- 
uct is, in the highest sense, just." ^ The question 
must be answered in the negative. While a man 
has an indisputable right to all the utilities that he 
creates with the aid of his own materials and with- 
out assistance from other men, his claim to be re- 
warded in proportion to his activity is by no means 
so clear when there is question of a joint product. 
In the latter case productivity would seem to be the 
lowest of all the titles of ownership. It is inferior 
to eftort. Of two men who contribute to the crea- 
tion of a common product and who have made equal 
efforts and sacrifices, why should the stronger, or 
more skilfull or more intelligent receive a greater 
recompense than his less efficient fellow? The latter 
has done his best, the former can say no more. It 
is not denied that achievement ought to be considered 

^ See his "Labor and the Popular Welfare," passim ; and 
"Aristocracy and Evolution," Book III, ch. I. He has been 
effectively answered by Mr. Hobson in the "Contemporary 
Review," August, 1898. 

* Clark, "The Distribution of Wealth," p. 8. 



to some extent in apportioning a reward among co- 
operators, but it is maintained that our native sense 
of justice always dictates that the distribution 
should be made in accordance with individual merit, 
good will, self-sacrifice, conditions that are within 
the control of the workers, rather than aptitudes 
and qualities for which they are not personally 
responsible. This is certainly the standard by which 
we hope to be judged in the Life Beyond. Measured 
by the rule of efforts and sacrifices, the laborer, gen- 
erally speaking, has as large a claim to remuneration 
as the landowner, the employer, or the capitalist. 
Again, the title of productivity must give way to 
that of needs, which is the end to which all other 
titles are but means. The primary reason why men 
should own property of any kind is to be found in 
their wants. By these must all other claims to 
ownership be determined and conditioned. Since 
all men are equal as persons, the essential needs of 
personality are of equal moral validity in all. Hence, 
the person's right to the minimum of goods necessary 
to satisfy these fundamental needs is superior to any 
of the merely secondary claims. 

When the employer cannot pay a Living Wage he 
is for the time being freed from actual obligation, 
as no one is morally bound to do the impossible. 
The contention that such a man ought to cease to be 
an employer will scarcely hold in the face of the 
hardship that he would thus undergo. A man's 
fundamental right to get a living on reasonable 
terms carries with it some kind of claim to remain 
in the economic position in which he has become 



established; and this claim will cease to exist only 
in the presence of grave contrary reasons. On the 
other hand, the inability of one or many employers 
to discharge the obligation will not free those who 
are better situated. The prosperous employer can- 
not exculpate himself on the ground that he is pay- 
ing as high wages as his neighbors. * 

"Cannot pay a Living Wage" is, however, ex- 
tremely vague. To one it may mean that if he does 
so he will be unable to increase his personal expendi- 
tures, or better his social position ; to another, that 
the profits remaining will not be a fair remunera- 
tion for his skill, energy, and directive ability; to a 
third, that he will have nothing left with which to 
extend his business or make new investments; to a 
fourth, that he will not receive a fair rate of interest 
on his capital. The first three of these interpreta- 
tions are morally invalid because they imply a sub- 
ordination of the essential needs of the laborer to the 
non-essential needs of the employer. All the ends 
that the employer seeks to realize in these three ways 
lead ultimately to the satisfaction of wants that are 
superfluous relatively to his present standard of liv- 
ing. Now employer and employee are equal in per- 
sonal dignity, and their essential needs are of equal 
worth and moral importance. Consequently the 
essential needs of one are morally superior to the 
accidental needs of the other. The laborer's need 
of the requisites of a decent and reasonable life is 
more important in the moral order than the employ- 
er's need of life's conveniences and superfluities. If 

^ Cf. Verineersch, "Quaestiones de Justitia," pp. 579, 580. 


the individual's obligation to use and distribute the 
resources of the earth consistently with the rights 
of his neighbors thereto is more than a vague and 
empty formula, it surely means in the concrete that 
the employer is bound to distribute the product of 
industry and his personal income in such a way that 
his own secondary and unimportant wants shall not 
be preferred to the primary and vital needs of those 
who expend all their working time and energy under 
his direction and for his benefit. 

The industrial employer, the employer of men 
who produce for the market, has obviously a right 
to get a decent livelihood from his business. And 
this means not merely goods absolutely necessary 
for right living, but also conventional necessities. 
Since the latter vary according to a man's station — 
the position that he holds socially and economically, 
and the scale of personal and family expenditure to 
which he has become accustomed, — a decent living 
for the employer will, as a rule, include more of the 
good things of life than in the case of the laborer. 
In both cases it corresponds with the standard of 
life peculiar to the class. The absolute necessaries 
of life are approximately the same for employer and 
employee, namely, a reasonable minimum of food, 
clothing, shelter, education, and recreation; their 
conventional necessaries differ on account of the 
different ways of living to which they have become 
accustomed, and which they have come to regard 
as essential. Undoubtedly the employer would suf- 
fer a slighter hardship if his expenditure for things 
conventionally necessary were diminished by, say, 



ten per cent., than would the laborer whose outlay 
for his conventional needs was curtailed in the same 
degree ; yet the general statement remains true, that 
the loss of conventional necessities entails suffering 
upon both. Hence the rule above laid down does 
no injustice to the laborer, since it merely treats 
laborer and employer unequally in so far as they are 
unequal, that is, in regard to their habits of living, 
but treats them equally with reference to inconve- 
niences that affect them equally. It is altogether just 
that the employer should retain a sufficient amount 
of the proceeds of his business to maintain himself 
and family in reasonable conformity with the stand- 
ard of living that he has come to look upon as proper 
to his station. Until he has paid all his employees 
a Living Wage he ought to refrain from all costly 
expenditure for the purpose of amusement and re- 
creation, and in general from everything that comes 
under the head of luxurious living. The term lux- 
ury is, indeed, very vague and very relative. No 
general rule can be framed that will distinguish 
sharply between luxuries and conventional necessi- 
ties. Again, the different social classes in American 
life merge into one another by insensible grada- 
tions, so that men frequently regard the grade just 
above them rather than the one in which they actual- 
ly live, as the standard to which their expenditures 
ought to conform. And yet, some general observa- 
tions may be made which are sound and helpful. 
The employer who cannot at the same time pay a 
Living Wage to all his employees and live in his 
customary manner, ought not to go beyond the 


moderate satisfaction of the physical, intellectual, 
moral, and spiritual wants of himself and his family. 
He ought to avoid all lavish feasting, all extrava- 
gant forms of amusement, and all ostentation in 
dress, equipage, and household appointments. His 
right to satisfy any of these wants yields to the right 
of his employees to the conditions of a decent liveli- 

The claim of the employer to a fair rate of interest 
on his capital at the cost of a Living Wage for the 
laborers in his employ, likewise puts his non-essen- 
tial needs above the essential needs of the latter, and 
is consequently unsound. The right of capital to 
obtain interest is sometimes asserted in such a way 
as to indicate a belief that this is the supreme right 
in the field of distribution. Capital is personified. 
There should be no need to insist that capital is not a 
moral and rational being, and can have no moral 
claim to a share in the product. It is a condition of 
production, but not a producer in the same sense as 
the laborer and employer, nor has it any moral and 
rational needs to be supplied out of the results of pro- 
duction. Its claim to a portion of the product must be 
made on behalf of its owner and in terms of his 
rights. Now the only titles that justify the receipt of 
interest by the capitalist are these two : the produc- 
tivity of capital, and the sacrifice involved in ac- 
cumulating instead of spending income. 

The formula, res fructiiicat domino ("a thing 

fructifies to its owner") unquestionably states a 

general truth, but it must be dififerently interpreted 

with regard to different kinds of property. A man 



who, unaided by others, uses his own land, raw ma- 
terial, tools, and machinery to bring into existence 
a product, say, wheat or shoes, has a right to the 
whole of that product, including the share of it that 
represents the productive action of capital. In such 
cases the owner's claim to the fruits of his property 
is unconditionally valid. The utility produced by a 
rented dwelling goes to the occupier immediately, 
but redounds to the proprietor in the form of rent. 
The latter gets the product of his property, inasmuch 
as he is paid what is regarded as the product's value. 
To him this virtual fruit rightfully belongs, as there 
is no one else who can establish a shadow of counter- 
claim. When a field or a building that is used for 
commercial or industrial purposes, is hired out, its 
fruits become merged in the general product and are 
indistinguishable therefrom. They are, however, 
assumed to be adequately represented by the price 
that is paid for the use of their material cause. Here, 
again, the owner reaps the virtual fruit of his prop- 
erty. Similarly the interest that a man receives on 
money he has loaned to a business man, for example, 
a manufacturer, is regarded as the equivalent of the 
product of the material capital into which the loaned 
money has been converted. The owner of the money 
receives the fruit of his virtually productive proper- 
ty in the shape of interest. Whether these m.ethods 
of measuring the product, according to which it is 
valued in terms of rent and interest, ever represent 
the precise physical contribution made by land and 
capital to the combined product, cannot be known ; 
but they are the only methods that are practicable. 



Now the right of the money lender to take this equiv- 
alent of the fruit of his money is just as valid as the 
corresponding right in the owner of the field, the 
owner of the building, or the owner of capital instru- 
ments. All of these claims are essentially the same, 
namely, the claim asserted by the owner of a mate- 
rial factor of production over the commercial equiva- 
lent of the factor's product. Is this claim morally 
valid? Our special concern here is with material 
capital which the owner has purchased without the 
assistance of a loan, and which he manages in his 
capacity of employer and director of industry. 

It seems clear that the right of such a man to the 
imputed fruit of his property, in other words, to 
interest on his capital, is as real and legitimate as 
any other right of ownership. Who else can right- 
fully claim this portion of the general product? Not 
the laborer, for if we assume that his needs and ef- 
forts are already fully remunerated, the only title 
that can be urged in his behalf is that of produc- 
tivity. Now it is true that the co-operation of the 
laborer is necessary to make capital actually pro- 
ductive ; but it is also true that the presence of capi- 
tal causes the laborer's efforts to be followed by a 
larger product and a higher wage than would be 
possible if he worked alone. Consequently the laborer 
is not the sole cause of the product. Some part of 
it has been as truly produced by capital as some part 
of a potato is produced by moisture. In so far as 
this portion of the product is adequately represented 
by interest, the latter cannot justly be claimed by 
the laborer on the ground of productivity. Can it 


be reasonably claimed by the consumer in the shape 
of lower prices for the finished product? As director 
of production, the capitalist-undertaker receives the 
equivalent of his exertion in profits ; as capitalist, he 
performs no labor nor undergoes any sacrifice when 
he allows his capital to be used as a factor of pro- 
duction; why then should he claim its product? 
Does not the latter properly belong to the whole 
people? The theory that is implied in these ques- 
tions maintains that interest should be abolished, on 
the ground that the productive forces of nature, 
artificial as well as natural, cannot rightfully become 
the subject of private ownership, but are the com- 
mon property of the community. This being so, 
the product of capital should go to the community, 
and not to any one individual. To the community it 
will go if no interest is paid and the price of the 
product is reduced accordingly. Even in this theory 
the principle, "to the owner of a thing belongs its 
fruits," is acknowledged and asserted. The obvious 
answer to the theory is that the assumption under- 
lying it is unsound. There are in men certain in- 
eradicable convictions, desires, and aspirations 
which make it impossible that social welfare and the 
welfare of the majority of individuals should be as 
well conserved by common as by private ownership 
of capital. Now what the race firmly believes to be 
just and necessary in the matter of opportunities of 
ownership must be taken as fairly representative of 
objective justice; and social welfare must be accept- 
ed as a sufficient justification of private ownership 
of capital. After all, the primary title and reason of 


possession is the needs of men, and if these are 
better provided for by the institution of private 
property in the productive resources of the earth 
the institution is morally legitimate. The question 
of right at issue here does not hinge on any meta- 
physical consideration of the intrinsic qualities of 
capital-goods, but solely on the comparative utility 
of the two kinds of ownership to attain the end of all 
ownership. This principle, too, is admitted by the 
opponents of private ownership ; for their opposition 
is based on the assumption that human needs and 
human welfare would be better subserved if capital 
were owned collectively. If they are mistaken in 
this, individual proprietorship of capital is right, and 
the individuals may justly claim its product. 

Again it must be insisted that we can never know 
whether the productivity of capital relatively to that 
of the other factors, is precisely expressed in the 
rate of interest. Yet interest is the only available 
measure of such productivity, and is, therefore, a 
sufficient recognition of the moral principle, "to the 
owner of a thing belongs its fruits." 

This principle is valid, but it is not the only valid 
principle of ownership. Consequently, a fair rate 
of interest is not necessarily one that will yield to the 
owner the full product of his capital. It is rather 
that rate which will safeguard the right of the capi- 
talist consistently with, and in subordination to, the 
claims of needs, efforts, and the productivity of 
labor. For the productivity of property, natural or 
artificial, is the least and lowest of all the titles of 
property. All the other titles are based upon the 

17 257 


personal dignity, personal exertion, or personal 
achievements of their beneficiary: interest accrues 
to the owner of capital without any reference to 
his present needs, efforts, or achievements. The 
employer's right to obtain the ordinary rate of inter- 
est on his capital is, therefore, subordinate to the 
right of his employees to receive the means of sup- 
plying their essential needs in accordance with the 
standards of decent living. 

Concerning the second title to interest, it must be 
noted that the accumulation of a great part of the 
capital now in existence has not cost its owners any 
real pain of abstinence. Some of it has been in- 
herited, and some of it saved out of incomes that 
were in excess of all the existing wants of the 
recipients. None of the inheritors of wealth have 
practised the self-denial incidental to continuous 
saving, though a portion of them, namely, the bene- 
ficiaries of small legacies, undoubtedly made some 
sacrifice when they converted their inheritance into 
capital, instead of immediately consuming it. But a 
man enjoying a very large income suffers no notable 
inconvenience when he devotes a goodly portion 
of it to the purposes of production. As applied to 
this kind of "saving," Lassalle's sarcastic comments 
on the "abstinence theory" are fully justified. * 

On the other hand, much of our present stock of 
capital represents a real sacrifice of desires that 
clamored for satisfaction when the saving took place. 
According to Mr. Devas, even this species of saving 

^ See his work, "Herr Bastiat Schultze von Delitsch," ch. 



"is amply rewarded without any need of interest or 
dividends. For the workers with heads or hands 
keep the property intact, ready for the owner to 
assume whenever convenient, when he gets infirm 
or weak, or when his children have grown up and 
can enjoy the property with him." ^ Saved wealth 
cannot, indeed, be continued in existence unless it is 
embodied in material goods ; money must be either 
spent or converted into capital-instruments ; and yet 
there is grave reason to doubt whether all of those 
who save at the expense of present desires would re- 
gard the mere preservation of their wealth as suffi- 
cient recompense for the abstinence undergone. It 
would seem that those savers who do not take this 
view have a just claim to an additional remunera- 
tion in the form of interest, — unless sufficient capital 
would come into existence without their contribu- 
tion. In that case they would be in the position of 
those who make sacrifices to produce something 
that society does not want. 

No definite answer can be made to these questions 
of fact, and, so far as our present purpose is con- 
cerned, none is necessary. Even those employers 
who have accumulated capital at the cost of self- 
denial, and who would not have saved had there been 
no prospect of interest, have a less urgent claim to 
interest than have their employees to a Living Wage. 
When both claims cannot be satisfied, or fully sat- 
isfied, the former must yield. For the supreme 
title of ownership is that based on the dignity of the 
person, on his essential needs; and the employer is 

^"Political Economy," p. 507, 2d edition. 


morally bound to so distribute the product of his 

business that, after he has taken out the requisites 
of a decent living for himself, the claims of his em- 
ployees to a Living Wage will be fully satisfied, even 
to the complete neglect of such claims as unusual 
productivity of labor, the productivity of his capital 
and his sacrifices of saving. 

The obligation that in private business rests upon 
the employer is distributed in a corporation, or joint- 
stock company, among all the shareholders. Since 
the direction of the business resides ultimately in 
them, they are the real employers, and they cannot 
reasonably shirk the responsibility of paying just 
wages. This responsibility falls in a particular man- 
ner upon the board of directors and the officers, but 
it extends in some degree to the owner of even one 
share of stock. Like the private employer with re- 
gard to the money that he has invested in his busi- 
ness, the stockholders of a corporation are morally 
bound to pay all the employees, including, of course, 
those who are actively engaged in its direction, a 
Living Wage before they pay themselves dividends. 
And it would seem that those shareholders whose 
labor of direction is confined to annual or semi- 
annual meetings, and who have no means of living 
except the dividends accruing to them, have a less 
urgent right to receive a decent livelihood there- 
from than have the employees to obtain a Living 
Wage. The needs of the latter are no more im- 
portant than the needs of the non-working stock- 
holders, but they are associated with labor, personal 
effort, which is a stronger title of ownership than 


the productivity of capital or past sacrifices of sav- 

To sum up : the obligation to pay a Living Wage 
falls upon the employer as a reasonable consequence 
of his position in the economic organism. From this 
responsibility he cannot free himself by appealing 
to the labor contract or to the productivity of labor ; 
for the former is consistent with extortion, while the 
latter is usually unknowable, and is always inferior 
to needs as a canon of distribution. Inability to per- 
form the obligation suspends it, but inability must 
not be so interpreted as to favor the superfluous 
needs of the employer at the expense of the essential 
needs of the laborer. The employer's right to obtain 
interest on the capital that he has invested in his 
business, though real, is subordinate to the laborer's 
right to a Living Wage. 

Note to Second Edition. — The claim of the 
employer to State aid whenever he is unable to pay 
a Living Wage and at the same time obtain interest 
on his investment, is unsound ethically as well as 
economically. Competent employers will not need 
such assistance, and incompetent ones have no valid 
title to it. On the other hand, the employer who 
cannot make a living profit and also pay a Living 
Wage from his business, is not obliged to make up 
the latter from property with which he has no con- 
nection as an employer. 



The Obligation of the Loan-Capitalist^ the 

Landowner, the Consumer, and the 

Man of Wealth 

The loan-capitalist and the landowner are under no 
practical obligation to supplement directly the wages of the 
underpaid laborer. The consumer can discourage the pay- 
ment of insufficient wages by refusing to patronize the 
ofifending manufacturers and merchants. And he is moral- 
ly bound to do so. The meaning of "superfluous" goods. 
These ought to be given without reservation for the relief 
of the underpaid. Methods by which such distribution 
could be carried out. 

The employer may fail to pay a Living Wage 
either because he cannot or because he will not. 
Does the obligation, thus unfulfilled, revert to other 
members of the community? to whom? and in what 
measure ? 

Undoubtedly a part of the responsibility of treat- 
ing the laborer justly is shared by the capitalist who 
has loaned money to the employer for use in his 
business, and by the landowner who has rented him 
land for the same purpose. They are beneficiaries 
of the laborer's exertion, and consequently are in- 
debted to him in a particular way ; they also receive 
a portion of the product of industry, and are thereby 


enabled, in many cases, to do something toward sup- 
plying what is wanting in the laborer's remunera- 
tion. Yet if the employer's failure to pay a Living 
Wage is not due to inability on his part, it seems 
sufficiently clear that the loan-capitalist and the land- 
owner have no direct obligation to make good the 
difference. In so far as their incomes surpass their 
reasonable needs, they are, of course, bound to make 
a righteous use of the excess ; but their economic 
position scarcely obliges them to do more than exert 
pressure upon the employer to compel him to dis- 
charge fully his wage-paying jbligations. 

When, however, the employer is really unable to 
give all his employees the means of a decent liveli- 
hood, the right of the loan-capitalist and landowner 
to receive the product of their property in the form 
of interest and rent seems to be inferior to the right 
of the laborer to obtain a Living Wage. The latter 
has contributed his labor power, the former have 
contributed the use of their goods to the making of 
the common product. In the distribution of the 
product the claims of labor, personal effort, ought 
to be preferred to those of mere ownership in the 
product's material cause. Consequently, the em- 
ployer should be allowed and constrained to provide 
his employees with a Living Wage before returning 
rent to the landowner or interest to the loan-capital- 
ist This seems to be the theoretical justice of the 
situation. An attempt to put it in practice would 
probably be followed by greater evils than those 
that are sought to be remedied. Let us assume 
that the landowner and the loan-capitalist do their 


share by instructing the employer to give them their 
portions of the product only after he has fully 
remunerated all the laborers. In a large propor- 
tion of cases they cannot know whether the residue 
is really insufficient to yield them the whole amount 
of rent and interest conditionally stipulated. The 
employer will in such circumstances be able to re- 
tain for himself what he owes to them. Even if he 
acts with entire honesty in this respect, he may, with- 
out being compelled to, continue to sell his product 
at a price that will render full payments of rent and 
interest impossible. To be sure, if the loan-capital- 
ist and the landowner could always be certain that 
the employer did his best to make them a complete 
return for the use of their property, their obliga- 
tions, as above outlined, would seem to be actual 
and concrete. As things are, however, their respon- 
sibility toward the underpaid laborer who works 
with their property must be discharged in some 
other way. 

When the employer's inability to pay a Living 
Wage is due to the low price at which he is com- 
pelled to sell his product rather than to his own in- 
competence, the chief beneficiary is, of course, the 
consumer. Yet the average consumer is wholly in- 
dififerent to any responsibility toward the under- 
paid producers of the cheap goods that he so vigi- 
lantly and avidly seeks to secure. In this connection 
the following paragraph from the pen of Mr. W. S. 
Lilly is extremely suggestive : 

"One afternoon I chanced to meet in Regent 
Street three lady friends who had come up to town 


for shopping, and I remember their surprise and de- 
light at finding in one of the estabhshments which 
they visited shirt blouses, of a dainty kind, on sale 
at half-a-crown each. They purchased a dozen, and 
evidently regarded this cheapness as simply miracu- 
lous. They were so good as to invite me to dine 
with them that evening at a restaurant of which I 
will not mention the name, for I have no desire of 
advertising it. Nor indeed is that necessary. The 
perfection of its cuisine and the excellence of its 
wines have deservedly won for it a world-wide 
reputation. It is as deservedly celebrated for its 
high charges. I could not help noticing that on 
the occasion of which I speak my kind hostess re- 
ceived very little change from the five pound note 
which she tendered in payment for our dinner. The 
evening was fine : and after taking leave of my 
friends I set out to walk to South Kensington. 
When I reached Hyde Park Corner a carriage dashed 
rapidly out of the Park, and a young girl, who was 
walking just in front of me, was almost run over. 
Apparently she had not noticed it : fortunately I had 
seized her by the arm and pulled her back in time. 
She seemed a good deal frightened and inclined to 
be hysterical. A constable came up, and I looked 
at him interrogatively, wondering whether she was 
quite sober. He caught my meaning and after a 
swift glance at her, said : *No, sir, it's not drink : it's 
hunger. If she sits down for a bit she will pull her- 
self together.' He helped her to a seat just inside 
the Park and left her there, after a minute, murmur- 
ing something which I did not quite catch abont 


sending someone to her. The girl said to me : 'Thank 
you for saving me ; I was nearly killed, I think' ; and 
she shuddered. She was a slight, delicate-looking 
creature, of plaintively prepossessing appearance, 
neatly dressed, and quiet in manner. I replied: 
'Yes, you had a narrow escape ; now that you have 
recovered from your fright, shall I put you into a 
hansom and send you home?' 'Thank you,' she 
answered, 'but I mustn't go back yet: I have come 
out to try to earn a little money; I spent my last 
shillings in buying those shoes to come out in, and I 
owe my landlady a fortnight's rent: I haven't been 
able to get any work lately.' I inquired what she 
worked at. She told me she made ladies' shirt 
blouses, but could not live on what she earned in 
that way ; she was paid four shillings for making a 
dozen : it was the usual rate ; she worked for Messrs. 

, mentioning the tradesmen whose shop my 

fair friends had visited that afternoon. It is a 
dictum of Renan that the miraculous is the unex- 
plained ; and this was the explanation of those 
miracles of cheapness at which my friends had 
marveled." ^ 

The obligation of the consumer toward the under- 
paid laborer involves two questions : can he do any- 
thing to bring about better wages ? and is he moral- 
ly bound to make use of whatever power he possesses 
in this direction? 

Since all production and trade are carried on with 
a view to the wants of the consumer, the latter holds 

^ "The Cost of Cheapness," "The Fortnightly Review," April, 



the dominant position in industry. Goods will be 
produced of such quality, in such amounts, and 
under such conditions of employment as he efifect- 
ively demands ; that is, in accordance with his wishes 
plus his readiness to pay the necessary costs. If he 
says to the manufacturer or to the merchant, "unless 
you pay your employees a Living Wage, I will not 
buy your goods," his terms will be accepted. Conse- 
quently an organization embracing the majority of 
consumers, and employmg agents to ascertain the 
wages that have been paid for the production of the 
various commodities on the market and the prices 
for which the latter must sell in order that the pro- 
ducers may be decently remunerated, could soon put 
an end to the evil of underpaid labor in industrial em- 
ployments. While an association of such magnitude 
is not inherently impossible, it is clearly impractic- 
able, or at least so unlikely as to render serious con- 
sideration of it a waste of time. As things are, the 
consumer who wishes to discourage low wages must 
act individually or as a member of local and incom- 
plete organizations. When the goods that he wishes 
to buy can be obtained from manufacturers and 
dealers that treat their employees fairly, he can 
patronize these in preference to firms that are unfair. 
How is he to distinguish between the two classes of 
employers? Not infrequently the necessary infor- 
mation will come to him casually and through 
various unrelated channels ; more often perhaps it 
will be available through the systematic work of 
Labor Unions and the Consumer's League. The 
former affix their Union Label to those goods that 



have been produced in accordance with their stand- 
ard of remuneration, hours, workshop conditions, 
etc. The Consumer's League also has a Label 
which it puts upon articles manufactured in the con- 
ditions that it regards as satisfactory, and a "White 
List" of merchants who treat their employees fairly. 
It may be assumed, therefore, that the producers of 
goods that bear any of these marks of approval are 
receiving, if not a Living Wage, at least a nearer 
approach to it than their fellows in the same em- 
ployments. Purchasers who call for these goods, 
and especially those who affiliate themselves to the 
Consumer's League, will contribute very materially 
toward the encouragement of fair employers and 
the discouragement of the unfair. 

Is the consumer morally bound to exercise such 
discrimination in making his purchases? He is not 
directly responsible for low prices and low wages, 
for he takes no active part in the making of either. ^ 
Yet he encourages the continuation of existing bad 
conditions when he seeks out and patronizes the 
dealers in cheap goods, regardless of the wages that 
have been paid to the producers. The fact that he 
is not primarily responsible does not acquit him of 
all responsibility and all obligation ; for, as Dr. Cun- 
ningham observes : "There is always this double 
responsibiHty to be looked to, responsibility for not 
doing our best to cure the evil, and responsibility 
for its existence." ^ If a Living Wage is to prevail 
in industry the consumer must provide the means 

^ Cf. Webb, "Industrial Democracy," pp. 671-673, ist ed. 
'"The Use and Abuse of Money," p. 157. 


of paying it. This is a function that he cannot 
shirk or shift to others. He is obHged to pay a fair 
price for the goods that he buys, and a fair price 
necessarily means one that will enable the producers 
to be decently remunerated. This elementary and 
fundamental obligation is indisputable : the practical 
question concerns the form that the obligation as- 
sumes when a combination of forces, partly within 
and partly without the control of the consumer, has 
brought or threatens to bring wages below the mini- 
mum of justice. Suppose the consumer finds him- 
self so placed that the issue depends upon his action : 
if he buys goods from A all the laborers will get a 
Living Wage ; if he patronizes B — who is selling 
more cheaply — they must continue to be underpaid, 
since the returns are not sufficient to give them more. 
Here there cannot be a shadow of doubt concerning 
his responsibility to the laborer, and his obligation to 
make his purchase from A. This hypothetical case is 
in some measure realized to-day whenever a consum- 
er finds it within his power to choose between mer- 
chants who deal in goods that have been produced 
under humane conditions and merchants whose goods 
have involved injustice to labor. The difference 
is one of degree only; for the actual consumer can 
do something toward the abolition of insufficient 
wages. What he can reasonably do in this direc- 
tion he is morally bound to do, and the same is true 
of the merchant in relation to different manufactur- 
ers. The effects of any single individual may seem 
insignificant, but the combined actions of all who 
are in a position to exercise the discrimination here 


advocated would lead to very large results. Be- 
sides, the reform of existing conditions will not be 
accomplished by any single agency or method; the 
co-operation of many and diverse forces, persons, 
and classes will be essential. Among all the classes 
that might contribute to this end, the consumer is 
perhaps the least conscious of his power and respon- 
sibility. In the simpler economic relations of the 
Middle Ages, when the consumer usually dealt di- 
rectly with the maker of the goods that he bought, 
the obligation to pay a price that would cover fair 
wages was easily perceived and acknowledged. 
To-day he is so far removed from the original pro- 
ducer, the causes of low wages are so various, and 
the whole mechanism of industry is so anarchic, 
that he seldom gives a thought to the relation be- 
tween himself and the man who ultimately makes 
cheap goods possible. Yet to divide and obscure 
responsibility is not to destroy it; consequently the 
consumer is morally answerable for insufficient 
wages in proportion to his power to make reasonable 
efforts toward bettering them. 

Thus far of the obligation of those persons who are 
directly benefited by the toil of the underpaid labor- 
er, and who stand in more or less immediate econom- 
ic relations to him. Let us consider briefly that class 
of persons who are bound to the insufficiently 
remunerated workers, as to other sections of the un- 
fortunate, by the general duty of charity or benefi- 
cence. These are the possessors of superfluous 
goods, the rich. From St. Paul * to St. Basil ^ ; from 

^ "Let your abundance supply their want," II Cor. VIII, 14. 
'"Are you not a despoiler, since you have made your owa 


St. Basil to St Thomas of Aquin ^ ; and from St. 
Thomas to Pope Leo XIII,^ the Christian teaching 
has been that superfluous goods are a trust to be 
administered for the benefit of the needy. The 
classification of private possessions, or private in- 
come, made by St. Thomas indicates the meaning 
that all Catholic authorities attach to the phrase, 
"superfluous goods." A man's goods, he says, may 
be divided into three categories : first, those that are 
absolutely necessary to sustain life: second, those 
that are required for the proper maintenance of 
social position: third, those that are left over after 
both of these ends have been met. ^ It is not easy, 
however, to mark off the last named possessions — 
those that are "superfluous" — from those of the 
second category. The majority of men can readily 
persuade themselves that their whole income is need- 
ed either to support their present style of living, to 
provide liberally for the future wants of themselves 
and their families, or to better their present condi- 
tion. "Bettering their condition," means for some 
men the indefinite accumulation of wealth merely 
for the sake of the consequent power and prestige, 
and for some women the progressive ability to out- 
shine their neighbors in extravagant entertainment, 
dress, equipage, etc. It is admitted on all sides that 

that which you have received to distribute?" Migne, "Patrologia 
Graeca," vol. xxxi, col. 275. 

^ "To give alms from one's superfluous goods is strictly 
commanded," "Summa Theologica," 2a. 2ae., q. 32, art i. 

^ "When one's necessities have been fairly supplied, and 
one's position fairly considered, one is bound to give to the 
indigent out of that which remains," Encyclical, "On the Con- 
dition of Labor." 

* "Summa Theologica," 2a. 2ae., q. ^^t art. 6. 


luxury is reprehensible, but the principle of the rel- 
ativity of luxury has been converted into the doc- 
trine that luxury is merely expenditure in excess of 
income. According to this interpretation, all in- 
comes, except possibly a few of the very largest, 
can be legitimately utilized in maintaining or ex- 
panding the social position of their recipients. Utter- 
ly insignificant, therefore, is the number of persons 
who possess superfluous goods, and are held to the 
duty of almsgiving or philanthropy. This apothe- 
osis of groveling selfishness is not, however, peculiar 
to our own time. In the last quarter of the seven- 
teenth century, Pope Innocent XI condemned the 
following propositions : "It is scarcely possible to 
find among people engaged in worldly pursuits, even 
among kings, goods that are superfluous to social 
position. Therefore hardly anyone is bound to give 
alms from this source." If these doctrines were 
false then they are a hundred times false to-day. In 
a general way it may be said that all of that portion 
of a man's income is superfluous that cannot be used 
for the satisfaction of his reasonable wants. As un- 
reasonable must be regarded all wants whose satis- 
faction involves injury to health, mind, or character. 
Consequently, excessive quantities of food or drink ; 
dyspepsia-breeding delicacies ; clothing, dwellings, 
and household furnishings that satisfy the desire to 
outdo one's neighbors in costliness and showiness, 
instead of increasing comfort or developing the 
esthetic sense ; indefinite amounts of idleness, amuse- 
ments, entertainments, and travel, — are all unreason- 
able and unjustifiable. They all spell deterioration 



and debasement, the pampering- of what is lowest in 
man at the expense of what is highest. Good clothes 
and good houses are legitimate and useful inasmuch 
as they promote comfort, self-respect, and the ap- 
preciation of the beautiful ; but they are clearly harm- 
ful to character when they respond to the vulgar 
desire to excel in what one has rather than in what 
one is or what one does. Recreation, amusement, 
social diversion, entertainment, and travel are all 
helpful within certain narrow limits ; w'hen they 
take up more than a small portion of a person's time 
and attention they become not merely useless but 
demoralizing. Indeed, the amount of money that 
can be expended for the conveniences of life, the 
ornamental and hedonistic side of life, consistently 
with a due regard for health, mind, and character, 
is very much smaller than the majority of men, rich 
and poor, habitually assume. And everything be- 
yond this belongs in the category of superfluous 

Is a man obliged to devote the zvhole of his super- 
fluous goods or income to works of benevolence? 
Mr. Andrew Carnegie answers in the affirmative, 
"This, then, is held to be the duty of the man of 
wealth : to set an example of modest, unostentatious 
living, shunning display or extravagance ; to provide 
moderately for the legitimate wants of those depend- 
ent upon him ; and, after doing so, to consider all 
surplus revenues which come to him simply as trust 
funds, which he is called to administer, and strictly 
bound as a matter of duty to administer in the man- 
ner which, in his judgment, is best calculated to pro- 

i8 273 


duce the most beneficial results for the community — • 
the man of wealth thus becoming the mere trustee 
and agent for his poorer brethren, bringing to their 
service his superior wisdom, experience, and ability 
to administer, doing for them better than they would 
or could do for themselves." ^ The Reverend L. 
Garriguet is substantially of the same opinion: "A 
man is obliged to give to the poor all his superfluous 

goods To keep back a portion of them, even 

an inconsiderable portion, is to go against the order 
of Providence and to retain for self what ought to 
benefit the neighbor." ^ The position of these writ- 
ers seems to be in harmony both with the law of the 
Gospel and the dictates of reason. Catholic moral- 
ists of authority generally deal with the matter some- 
what more precisely. They divide human distress 
into three classes : extreme, grave, and ordinary. A 
person is said to be in extreme need when he is so 
placed that he cannot, morally speaking, escape 
death, or some almost equivalent evil, such as loss 
of health or of limb, unless he is assisted by others ; 
in grave necessity, when perils of this magnitude are 
not actually imminent but merely probable, or when 
things that are necessary cannot be procured without 
great difficulty; in ordinary need, when extreme or 
grave evils can be avoided by reasonable personal 
effort, or when minor inconveniences must be suf- 
fered continuously if assistance come not from with- 
out. * The authorities that we are considering are 
not agreed as to the proportion of superfluous goods 

^"The Gospel of Wealth," p. 15. 

' "La propriete privee ," tome II, pp. 40, 42. 

^Cf. Lehmkuhl, "Theologia Moralis," vol. ii, No. 601. 



that ought to be given for the reHef of ordinary need : 
many of them say that "something" must be given ; 
others, that each possessor should give as much as 
would be sufficient to remove all such need if all oth- 
er possessors gave proportionately ; others, that two 
per cent, of a person's income should be so expended ; 
and still others, that two per cent, of one's super- 
fluous goods would satisfy the obligation. They 
seem to be virtually unanimous, however, in main- 
taining that persons having superfluous goods are 
morally bound to give away as much of these as is 
required to relieve all extreme and grave need. ^ 
Practically, this would seem to mean that a man is 
bound to devote his surplus income unreservedly to 
the alleviation of such cases of extreme or grave 
need as come under his notice. Now it can scarcely 
be doubted that a large section, perhaps a majority 
of the laborers who get less than a Living Wage are 
in grave need as this phrase is understood by the 
moral theologians ; for to be without the minimum 
requisites of decent and humane living is certainly 
as great an evil as the inability to live according to 
one's social position, which the theologians use to 
illustrate their meaning. "Necessitas gravis" is not 
too strong to describe the distress endured by per- 
sons whose habitual condition is to be insufficiently 
fed, clothed, housed, and provided against sickness 
and old age. Consequently the doctrine of the moral 
theologians seems to be in substantial accord with 
the views of Mr. Carnegie and Father Garriguet. 
Obviously the obligation of distributing super- 
^ Cf. Bouquillon, "De Virtutibus Theologicis," pp. 343, 344- 


fluous goods among the underpaid workers would 
not, except in extreme cases, be wisely discharged 
by direct gifts of money. These would tend not 
only to pauperize the recipients but to deter the em- 
ployer and the consumer from making any effort to 
improve existing wage conditions. Inefficient re- 
muneration can be effectively supplemented by phil- 
anthropy only through methods that reach this end 
indirectly, A few such methods may be mentioned 
here. The underpaid could be financially assisted 
to organize and maintain Labor Unions. "The great 
problem of poverty," says John A. Hobson, "resides 
in the conditions of the low-skilled workman. To 
live industrially under the new order he must organ- 
ize. He cannot organize because he is so poor; so 
ignorant ; so weak. Because he is not organized he 
continues to be poor, ignorant, and weak. Here is 
a great dilemma, of which whoever shall have found 
the key will have done much to solve the problem of 
poverty." ^ Two of these obstacles to organization, 
namely, poverty and weakness, would be very con- 
siderably reduced if means were available for the 
support of organizers, the renting of halls for meet- 
ings, the maintenance of a reserve fund, and for 
various other expenditures that are essential to effi- 
cient organization. Then, there is the matter of in- 
dustrial education, provision for which is so meagre 
in America, and so inferior to that of some European 
countries. ^ Greater opportunities of industrial 

^ "Problems of Poverty," p. 227. 

^ Cf. "Labor Problems," by Adams and Sumner, ch. XI ; The 
Seventeenth Annual Report of the Commissioner of Labor ; 
and vol. xxiii of U. S. Consular Reports, "Industrial Educa- 



training would enable many young persons to rise 
who under present conditions must enter the ovtr- 
crowded ranks of the unskilled, and thus diminish 
both the number of and the competition among the 
underpaid. In the third place, attention may be 
called to the unlimited amount of good that couid 
be accomplished through the building and main- 
tenance of hospitals for the treatment of insufficiently 
remunerated laborers and their families. Sickness 
always means distress, and it comes at some time or 
other to all; but among the poor it is exceptionally 
frequent and exceptionally burdensome and disas- 
trous. "Unnecessary disease and death are mainly 
active in bringing misery to the working classes and 
especially to those in poverty. The well-to-do class- 
es are relatively free from preventable, disease-pro- 
ducing conditions of work and of living." "To the 
poor sickness means more than illness. It means mis- 
ery of the severest kind." "Sickness assumes a new 
and more terrible meaning when one realizes that the 
mass of wage-earning families are pathetically de- 
pendent upon some one person's health." "It is a 
fertile and lively cause of poverty, constantly active 
and supremely powerful." "Among 10,000,000 
well-to-do persons the number of yearly deaths is 
probably not more than 100,000 ; among the highest 
class of wage earners the number is probably not less 
than 150,000; and among the poorest, or those in 
poverty, the number is probably not less than 350,- 
000."^ Adequate hospital accommodations and pro- 

tion and Industrial Conditions in Germany." 

^ From chapter IV of Robert Hunter's "Poverty." 


vision for efficient nursing in the home, would miti- 
gate and lessen these evils indefinitely. Finally, there 
is a method that would perhaps be more direct and 
more immediately fruitful than any of those already 
mentioned. "The overcrowding of the population on 
the acre in certain sections of Chicago exceeds that 
of the densest portions of London. In New York 
the conditions are three times as bad as they are in 
London." "There are about 360,000 dark rooms in 
Greater New York."^ An investigation made a few 
years ago in Boston showed .that twelve per cent, of 
the total number of persons in rented tenements, or 
37,613 persons, lived in habitations "having poor or 
bad outside sanitary conditions." ^ From the tables 
of the Sixth and Seventh Annual Reports of the 
Commissioner of Labor it is seen that out of 2,954 
families in the cotton and woolen industries 538 
lived in houses the average size of which was less 
than four rooms, and that only 592 out of 1,782 
families in the iron and steel industries occupied 
dwellings averaging four rooms or more each. Con- 
sidered from the viewpoint of comfort, health, or 
morality, the housing of working people constitutes 
one of the most acute and difficult of our modern 
social problems. It provides a most fruitful field 
for philanthropic and charitable effort. Money ex- 
pended to enable the underpaid laborers to become 
the possessors and owners of decent, comfortable, 
and sanitary homes would contribute more effective- 
ly to their permanent economic and moral better- 

^ "Poverty," pp. 342-344. 

' Eighth Special Report of the Commissioner of Labor, p. 



ment than any other work of benevolence that could 
be undertaken. The worker would not be utterly 
helpless ; he would have at least a place of shelter 
and a foothold in the struggle for existence. The 
resulting gain in health, energy, courage, and am- 
bition would aid him very materially in resisting the 
forces that threaten to press him down, and in his 
attempts to rise above his present level. This is a 
consideration of the gravest importance ; for in the 
words of Professor Walker : "Nothing, economical- 
ly speaking, can save industrial society from pro- 
gressive degradation except the spirit and the power 
in the working classes to resist being crowded 
down." ^ 

In these methods the loan capitalist and the land- 
owner who profit directly by tl.^ existence of insuffi- 
cient wages will find ample opportunity to discharge 
the obligations that arise out of this condition. And 
their obligations would seem to be graver than the 
obligation resting upon the man of wealth who 
stands in no such relation to the underpaid laborer. 
The duty of the latter is solely one of charity, while the 
duty of the loan-capitalist and the landowner seems, as 
abready explained, to partake of the nature of justice. 

Note to Second Edition. — To say that the em- 
ployer is obliged to forego interest on his investment 
until he has paid a Living Wage, while the loan- 
capitalist is free from such obKgation, is, indeed, to 
put the former at a disadvantage; but the balance 
is restored in the statement that the loan-capitalist is 
obliged to help the needy laborers in some other way. 

^ " Elements of Political Economy," p. 266. 


The Obligation of the Laborer 

The limitation o£ their number by the underpaid. It 
would increase the demand for their kind of labor, but in 
the concrete it means immoral practices and anti-social 
consequences. And it misplaces the responsibility for low 
wages. To increase productive efficiency, and therefore 
wages, is impracticable, except for a few individuals. 
Saving and total abstinence could raise but a small section 
of the underpaid to the level of a Livmg Wage. Organi- 
zation, while most effective among the better-paid, can ac- 
complish much even for the poorest-paid. 

Having considered the obligations of all the other 
economic classes relatively to the right to a Living 
Wage and to the existence of insufficient wages, let 
us glance briefly at the responsibility and obligation 
of the laborer himself. What can the underpaid 
worker do to raise himself to the plane of a decent 
livelihood ? 

A remedy for low wages that has for a long time 
been recommended to the laborer, especially by econ- 
omists, is the practice of what is somewhat euphe- 
mistically termed "sexual self-restraint." ^ Former- 

* Cf. Malthus, "Essay on Population," Bk. IV, chs. I-V ; 
Roscher, "Political Economy," sec. 163 : Mill, "Principles of 
Political Economy," Bk. II, ch. XII ; Hadley, "Economics," 
sees. 355-357- 



ly it was preached to all sections of the laboring pop- 
ulation, but it seems to be no longer thought neces- 
sary to the welfare of the better-paid classes. All 
the evidence at hand seems to show that these re- 
produce much less rapidly than the poorest classes. ^ 
Throughout Northwestern Europe there has oc- 
curred during the last thirty years a steady decline 
in the birth-rate, but only among those workers who 
are above the level of bare subsistence. If every- 
day observation may be relied upon, the same condi- 
tions obtain in America. It is the more prosperous 
laborers that are consciously restricting their num- 
bers, by marrying later and by reducing the size of 
their families. While denying that the larger com- 
forts enjoyed by the better-paid is the cause of the 
lower birth-rate prevailing among them, President 
Hadley admits that high comfort and low birth-rate 
commonly go together. ^ It would seem that the 
economically degraded propagate rapidly through 
utter lack of ambition and a feeling of hopelessness.^ 
The result is that their kind of labor, unskilled 
labor, continues to be excessively plentiful relatively 
to the demand for it. Hence the vital importance 
of lessening its supply through a diminished birth- 

Considered apart from its moral and social conse- 
quences, this remedy would undoubtedly be highly 
efficacious. Other conditions remaining the same, 
the wages of a group fall, or tend to fall, at every 

* See the very significant statistics cited in "Industrial 
Democracy," pp. 632-642, ist ed. 
^"Economics," sec. 57. 

'Walker, "Elements of Political Economy," p. 267. 


addition to its membership, and rise, or tend to rise, 
whenever increasing supply fails to keep pace with 
increasing demand. If the laborers in the lowest- 
paid groups should confine the number of their off- 
spring within sufficiently narrow limits, the genera- 
tion succeeding to their tasks would certainly be able 
to command living wages. It is a simple question 
of the quantative relation between demand and sup- 
ply. Walker was so thoroughly convinced of the 
necessity and utility of the measure that he recom- 
mended the strengthening and development of any 
economic desire that would crowd out the desire to 
propagate. "Almost anything is better than that 
the desire to propagate should not be, by some cause, 
restrained." ^ 

As to the morality of this recommendation, it 
must be noted in the first place that the laborer is 
not, as is so frequently assumed, bound by any obli- 
gation of justice to follow it.. The man who marries 
and brings into the world children whom he cannot 
maintain in the minimum conditions of decency, will 
sometimes sin against prudence, but he violates no 
rights, either of his wife, his offspring, or his fellow 
laborers of the group to which he belongs. His 
wife freely consents to the union; his unborn chil- 
dren have no rights sufficiently potent to annul his 
right of fatherhood ; and the right of his fellow 
workingmen to the larger advantages that they would 
obtain if fewer children were born to the group, is 
inferior to his right to become the head of a family. 
Indeed, it is doubtful whether even charity toward 

* "Elements of Political Economy," p. 296. 


his children or his fellows obliges the laborer to 
forego the advantages and consolations of family 
life in order that the hand of social injustice may- 
fall less heavily upon them. It would seem that 
charity does not bind at the cost of such great per- 
sonal inconvenience. 

Generally speaking, the underpaid laborer is not 
only not obliged to abstain from or indefinitely post- 
pone marriage, or to limit the number of his off- 
spring, but is under obligation to do the very oppo- 
site. Theoretically and hypothetically, these meth- 
ods of preventing an over-supply of low-paid labor- 
ers are excellent ; human nature being what it is, 
they mean in actual life immoral practices and anti- 
social consequences. The great majority of men 
find it extremely difficult to forego marriage or 
deliberately to postpone it for a long time, and remain 
chaste. No man who is acquainted with the lessons 
of history and observant of the ordinary and obvious 
facts of the life about him will question this state- 
ment. The practice of limiting the number of chil- 
dren is immoral because in the overwhelming ma- 
jority of cases it is accomplished by means of un- 
healthful and unnatural actions. Reputable physi- 
cians are unanimous in pronouncing these disgust- 
ing devices a serious menace to health, while the 
moralist condemns them as frequently criminal, /. e., 
the murder of the unborn offspring, and always per- 
verse and degrading. They are perverse, inasmuch 
as they defeat the primary end of marriage, conflict 
with the standard of action decreed by nature, and 
permit the beast in man to triumph over his higher 


self; and they are degrading, inasmuch as they 
brutalize the most sacred of marital relations, con- 
verting husband and wife from co-workers with the 
Creator into instruments of mutual gratification. 

These precautionary measures are hurtful to so- 
ciety because they promote egotism and enervating 
self-indulgence among all classes, the unmarried, the 
parents, and the children and because they portend 
a stagnant or even a declining population. The 
average man who refuses to marry, or who indef- 
initely postpones marriage from a disinclination to 
assume its burdens or a love of personal "independ- 
ence," deprives himself of one of the most effective 
means of developing the finer side of character. He 
becomes self-centered and unsympathetic, and, gen- 
erally speaking, is a poorer type of citizen than the 
man who becomes the head of a family before he 
reaches middle age. Only in the family is it possi- 
ble for the majority of men to develop those social 
feelings that are essential to the welfare of a demo- 
cratic society. And the deliberate restriction of the 
number of offspring fosters in the parents a love of 
material goods and a self-indulgence which are fatal 
to moral and intellectual improvement, while it re- 
sults in children who are over-indulged and under- 
disciplined, and who as men and women will be even 
more devoted than their parents to selfish and mate- 
rialistic ideals. As President Roosevelt declared in 
his famous letter on "race suicide," and later on in 
his address to a meeting of mothers : "If the men of 
the nation are not anxious to work in many different 
ways, with all their might and strength, and ready 


and able to fight at need, and anxious to be fathers of 
families, and if the women do not recognize that the 
greatest thing for any woman is to be a good wife and 
mother, why, that nation has cause to be alarmed 
about its future." "The way to give a child a fair 
chance in life is not to bring it up in luxury, but to 
see that it has the kind of training that will give it 
strength of character." The practice of the small- 
family cult tends inevitably to a society whose mem- 
bers will be incapable of that degree of self-sacrifice 
without which mental and moral progress are im- 
possible ; nay, more, to a society that will be mental- 
ly, morally, and physically decadent. The disastrous 
effects of the practices that we are considering on 
the movement of population are already manifest. 
A noted economist had advocated the importation of 
French Canadians to replenish the national stock of 
France. According to Sidney and Beatrice Webb, 
"the dangers to be apprehended in Northwestern 
Europe is not over-population at all, but a deliberate 
restriction of population by the prosperous, more 
intelligent, and more thrifty sections." ^ The low 
birth-rate among families of native American parent- 
age, to which writers have frequently called attention 
of late, is nothing less than startling, "The rate of 
child-birth has been decreasing with astonish- 
ing rapidity among the native American-born 

of our population, until it has reached a minimum ; 
the number of children to the native American fam- 
ily of all classes (and in this lies the danger) being 
less than it is in any other country, France even not 
^"Industrial Democracy," p. 641, 26. ed. 


excepted, which has long been known to be at the 

point of stagnation Less than two surviving 

offspring to reproduce the race for all native-Amer- 
ican marriages." * Nor is this the whole story. 
Notwithstanding the assertions of apologists for the 
foreign-born couples, honest and intelligent observa- 
tion shows that a considerable and rapidly growing 
section of these are zealous imitators of the example 
set by the native-born. Let the reprehensible prac- 
tice be, as some of the economists urge, generally 
adopted by the underpaid workers, native and 
foreign-born, and we shall soon be compelled to con- 
template a stationary if not a declining population. 

Even from the purely economic point of view, the 
remedy under discussion is of questionable value. 
"Slow growth of population and quick growth of 
capital," says Professor Clark, "offer the conditions 
of rapidly increasing welfare for the working class- 
es." ^ This statement ignores the fact that the de- 
sire to become the head of a family and the necessity 
of providing for wife and offspring, are two very 
strong incentives to the expenditure of productive 
energy and the accumulation of capital. On the 
other hand, the selfishness fostered by aversion to 
marriage and parenthood tends naturally toward 
indolence and inertia. 

The preaching of the doctrine of "sexual self-re- 
straint" hinders a proper appreciation by the public 
of the true character and causes of the evil of in- 

^ Dr. George J. Engelmann in "Popular Science Monthly." 
June, 1903. 

^"Publications of the American Academy of Political and 
Social Science," No. 3, p. 2.2. 



sufficient wages, and obscures the responsibility of 
society and the necessity of social action. ^ It like- 
wise soothes the consciences of those individuals 
who are at fault, and shifts the blame to the shoulders 
of the innocent. Professor Ingram tells us that the 
teaching of Malthus found favor in certain quarters 
because it "tended to relieve the rich and powerful 
from responsibility for the condition of the working 
classes, by showing that the latter had chiefly them- 
selves to blame, and not either the negligence of 
superiors or the institutions of the country." - A 
similar statement would hold true of some of the 
advocates of the milder form of Malthusianism that 
is preached to-day. 

It is sometimes asserted that the underpaid laborer 
could secure an increase of remuneration by increas- 
ing his productive efficiency. Let him perform more 
effectively his present task, and also endeavor to fit 
himself for something higher. The adoption of the 
former practice would mean an addition to the profits 
of the business, and the possibility of additional com- 
pensation for the workers. The employer might, in- 
deed, insist on retaining all the extra gain, but he 
could not resist the temptation to increase the total 
additional profit by enlarging the number of his 
employees. Thus a rise in wages would be inevit- 
able, owing to the rise in the demand for labor. As 
the theory is frequently put, the laborer would get 
more because he produced more. The first objec- 
tion to this proposal is drawn from the fact that a 

* Cf . Maurice Block, "Les progres," p. 578. 
'"History of Political Economy," p. 121. 



large proportion of the low-paid workers are phys- 
ically unable to put forth greater productive energy ; 
in their case increased efficiency must be related to 
better wages as effect rather than as cause. Second- 
ly, the attempt would be almost wholly ineffective 
unless it were made by all, or at least, by a majority 
of the laborers concerned; otherwise the increased 
competition for labor among employers would not 
be sufficient to cause a general rise in remuneration. 
The gains resulting from individual and isolated 
efforts to increase productive efficiency would be 
nearly all secured by individual employers. Now to 
assume that the great majority of the underpaid 
workers could be induced simultaneously to enlarge 
their productive output, is to look for a unanimity of 
action that no practical man would venture to hope 
for in the case of any other social group. The first 
condition of the success of any such attempt would 
be a strong and numerically complete organization; 
but if this class of laborers were thoroughly organ- 
ized they could probably obtain a Living Wage with- 
out increasing their productive efficiency. Even if 
the desired unanimity of action were secured the 
results would perhaps be disappointing. The en- 
larged product might be more than sufficient to pro- 
vide all the producers with a Living Wage if it sold 
at the old prices, but experience shows that this con- 
dition would not be realized. The lower selling 
price of the product might justify only a very slight 
increase in wages. All would depend on the ratio 
that would exist between the reduction in price and 
the increase in output. Thus, a mere statement of 


the limitations of this proposal is sufficient to expose 
its weakness as a general remedy. 

The recommendation that underpaid laborers 
should fit themselves for some higher kind of work 
has some value in the case of individuals. Undoubt- 
edly there are many men in the ranks of the un- 
skilled who could accomplish something- in this di- 
rection if only they were a little more energetic, a lit- 
tle more ambitious, a little more hopeful. The ob- 
stacles to be overcome, however, bulk so large in the 
eyes of the worker that the plan is practicable for 
only a few. 

The practice of thrift and saving is another sug- 
gestion that is frequently urged. Speaking general- 
ly, this advice is good for all classes of men, but only 
within certain limits. There is such a thing as over- 
thriftiness and excessive saving, which are harmful 
alike to the individuals practising them and to the 
activity of production and industry. Waiving this 
consideration, we can readily admit the great ad- 
vantage to be derived from the possession of a per- 
sonal reserve fund. It helps the workingman to 
change his employment or his location whenever he 
becomes aware of better opportunities elsewhere, en- 
ables him to remain idle rather than immediately ac- 
cept the terms offered by the employer, and increas- 
es his bargaining power generally. For the major- 
ity of the underpaid, however, saving to a degree 
that would be effective supposes an unusual measure 
of self-sacrifice, and cannot be regarded as a practic- 
able method of betterment. It will be efficacious 

19 289 


chiefly in the case of individuals among the un- 

A particular form of saving that is sometimes 
recommended with the utmost earnestness is ab- 
stinence from intoxicating drink. It is undeniable 
that the number of laborers, both well-paid and 
underpaid, who are reduced to a condition of eco- 
nomic wretchedness by this species of indulgence, is 
deplorably large. And yet, even universal total 
abstinence would go but a little way toward im- 
proving the standard of living of the underpaid 
workers. It would be very effective in those indi- 
viduals whose expenditure for intoxicating drink is 
considerably above the average, but for the whole 
class it would realize only a small fraction of the 
claims made by its more enthusiastic advocates. The 
average amounts expended annually for intoxicating 
liquors by families in certain industries are submit- 
ted in proof of this statement : * 



Expenditure per 

per family 

family for drink 

Pig Iron 



Bar Iron 






Bituminous Coal 






Iron Ore 












^ Seventh Annual Report of the Commissioner of Labor, pp. 



From this table it appears that the group of fam- 
ilies whose income was lowest, $401.65, had by far 
the smallest average expenditure for intoxicants, 
$8.58 ; that the outlay of the four groups of families 
whose annual income fell short of $600 averaged 
only $16.13 for this purpose; and that, with the ex- 
ception of those in the glass industry, none of the 
families in receipt of a higher income were very ex- 
travagant in the matter. Now if the four groups of 
families just mentioned are typical of the underpaid 
workers generally, it is certain that the practice of 
total abstinence would not elevate them as a class to 
the conditions of a decent livelihood, nor bring the 
lowest sections of them out of poverty into meager 
comfort. An addition of $16.13 to the annual in- 
come of the families of all the underpaid would still 
leave thousands of them below the level of reason- 
able living. 

Finally, there is the method of betterment fur- 
nished by organization. A formal defence of the 
necessity and utility of the Labor Union is happily no 
longer necessary. The features of our industrial 
system that render organized action indispensable to 
the welfare of the laborer, and the large, numerous, 
and varied gains that organization has brought him, 
are so obvious that only the densely ignorant or the 
hopelessly prejudiced can escape their cogency. 
Economists no longer warn workingmen that all 
combinations entered into for the purpose of raising 
wages must necessarily and inevitably prove futile. 
"Thus, economic authority to-day, looking back on 
the confident assertions against Trade Unionism 



made by M'Culloch and Mill, Nassau Senior and 
Harriet Martineau, Fawcett and Cairnes, has humbly 
to admit, in the words of the present occupant of 
the chair once filled by Nassau Senior himself, that 
'in the matter of Unionism, as well as in that of the 
predeterminate wage-fund, the untutored mind of 
the workman has gone more straight to the point 
than economic intelligence misled by a bad meth- 
od.' " ^ Professor T. S. Adams maintains, indeed, 
that: "The majority of economists have never been 
'against the Union,' and to-day professional econo- 
mists are practically unanimous in maintaining the 
usefulness and even the necessity of rationally con- 
ducted Unions." ^ And the economic justification of 
organization is well stated by Professor Adams: 
"There is then an indeterminate share in the product 
of industry which goes to the factor possessing the 
greatest bargain-power. Successful bargaining 
depends largely upon two attributes, commercial in- 
stinct in estimating the highest bid that your antag- 
onist can make, and the material power of holding 
out until he is forced to make that bid. It needs no 
discussion to show that the isolated laborer is woeful- 
ly lacking in both these attributes. He does not know 
what the employer can afiford to bid, and his mate- 
rial wants are so pressing that he cannot afford to 
hold out until the employer's most liberal terms are 
forthcoming. 'In the long run,' said Adam Smith, 
'the workman may be as necessary to his master as 

^"Industrial Democracy," p. 653, ist ed. 
* "Labor Problems," p. 241. 



his master is to him, but the necessity is not so im- 
mediate.' " ^ That organization has fulfilled in 
practice the expectations of theory is sufficiently indi- 
cated in the following excerpt from the Final Report 
of the Industrial Commission: "An overwhelming 
preponderance of testimony before the Industrial 
Commission indicates that the organization of labor 
has resulted in a marked improvement in the 
economic condition of the workers." - 

The effectiveness of organization is naturally 
greatest where it is least needed, in the higher groups. 
Here the workers are more intelligent, more self- 
confident, more ambitious, more closely associated 
in their work, better equipped financially to main- 
tain an effective organization, and less exposed to 
competition from without. Among the poorest sec- 
tions of the underpaid the obstacles in the way of 
organization are enormous. These workers are 
very frequently deficient in the intelligence, self- 
restraint, and mutual trustfulness that are essential 
to the initiation and maintenance of concerted ac- 
tion. Long hours at work and insufficient nutrition 
deprive them of that leisure and energy that are in- 
dispensable to the effective prosecution of the routine 
work of an association. Scanty wages render ex- 
ceedingly difficult the accumulation of a reserve 
fund. The permanency of any organization that 
they may form is threatened by the insecure char- 
acter of their employment ; for their places can 
usually be readily filled from the ranks of the unem- 

* "Labor Problems," p. 242. 
'p. 802. 



ployed. The last condition is, in the opinion of 
Sidney and Beatrice Webb, of itself sufficient to 
render organization valueless for the unskilled. 
"There is, in fact, for unspecialized manual labor a 
practically unlimited 'reserve army' made up of the 
temporarily unemployed members of every other 
class. As these form a perpetually shifting body, 
and the occupation of 'general laboring' needs no 
apprenticeship, no combination, however co-exten- 
sive it might be with the laborers actually employed 
at any one time could deprive the employer of the 
alternative of employing an entirely new gang." * 
They refer particularly to England where the per- 
centage of unempJoyment is much greater than in 
the United States. However, even John Mitchell 
declares : "It must be admitted that this problem of 
the unskilled and untrained is intensely difficult, and 
that it is only partially solvable by direct Trade Union 
effort." 2 

Still there is good reason to believe that the at- 
tempts of even the poorest and weakest of the un- 
skilled to maintain organizations are well worth 
while and will be amply justified by the results. 
However great may be the number of unemployed 
who stand ready to take the places of those at work, 
"there will always be a certain difficulty and loss in 
replacing a united body of employees by a body of 
outsiders, though the working capacity of each new 
comer may be equal to that of each member of the 
former gang." ^ Compared with the Unions exist- 

^ "Industrial Democracy," p. 758, ist ed. 
-"Organized Labor," p. 168. 
^ Hobson, "Problems of Poverty," p. 114. 


ing in the skilled trades, such associations as the low 
grade and low-paid workers can support are neces- 
sarily feeble, but they add something to the resisting 
power of the individuals who enter them. This in- 
crease in fighting strength may not always be pro- 
ductive of positive gain, but it is usually effective in 
arresting the forces that otherwise would reduce the 
workers to a still lower level. Organization, more- 
over, is frequently the means of compelling the pub- 
lic to pay some attention to the grievances of the op- 
pressed laborer, and to exert its influence, which is 
very considerable, for reform. And the results of past 
attempts to organize effectively the class that we are 
considering have, on the whole, been encouraging. 
"Trade Unionism," says John Mitchell, "has been 
successful in raising one trade after another from 
the profound slough of unskilled, unorganized, and 
unregulated labor. Much work which was former- 
ly absolutely unskilled and at which men were em- 
ployed a few hours at a time, to be taken on or dis- 
charged, fined or suspended at will, has now become 
organized so that the men secure fair wages, and by 
reason of that very fact earn and deserve them."^ 
Two notable examples are furnished by the garment 
workers and the anthracite coal miners. The former 
are apparently among the most helpless subjects for 
organization, and yet they have by this means 
achieved very substantial gains. ^ The union of all 
the classes of workers employed in the anthracite 
mining industry enabled them to carry on two great 

^ Op. cit., p. 170. 

' Cf. "The Sweating System," by Henry White, in Bulletin 
No. 4 of the Bureau of Labor. 



strikes within two years, the consequences of which 
were an immense improvement in the condition of 
all of them, from the highest to the lowest. This 
particular Labor Union is a good example of the type 
of organization that will prove most effective for the 
underpaid. The Industrial Union — so called be- 
cause it embraces all the employees of a give 'n- 
dustry instead of being confined, as is the l^ade 
Union, to those who work at a given trade or occupa- 
tion — by making the cause of any one section the 
cause of all, enables the low-paid and unskilled to 
command the active co-operation of the higher 
groups, and therefore to increase immeasurably their 
fighting power. It affords a splendid opportunity 
to the workers to create a real brotherhood of labor 
in which the strong will help to bear the burdens of 
the weak. And present indications are that it will 
before long become the prevailing form of labor 
organization in America. 

Of the various forms of self-help discussed in this 
chapter, "sexual self-restraint" is in practice im- 
moral and anti-social; the increase of productive 
efficiency, the practice of saving, and the exercise 
of temperance are more or less effectual in individual 
cases ; while organization provides the only method 
from which anything like general results can be ex- 
pected. It will not by itself obtain a Living Wage 
for all the underpaid, but it will accomplish more in 
this direction than all other efforts that the laborer 
can make put together, 



The Obligation of the State 

The policy of non-intervention false in theory and 
discredited by experience. Concrete eflfects of govern- 
mental restrictions. As the protector of natural rights, 
the State ought to compel employers to pay a Living Wage. 
Objections to the economic feasibility of a Living Wage. 
And to the possibility of securing it by legal enactment. 
Minimum wage laws are already in operation in Victoria 
and in New Zealand. The State could extend the Living 
Wage principle partially, and promote it indirectl}'. 

The obligation of providing the laborer with a 
Living Wage has been fully outlined in its individ- 
ual and class aspects. There remains only the ques- 
tion of the extent to which it rests upon the State. 
That baneful heritage of the eighteenth century, 
the doctrine that a minimum of State regulation of 
industry means a maximum of industrial freedom 
for the individual, no longer counts any considerable 
number of adherents. It is demonstrably false in 
theory, and it has been completely discredited in 
practice. Negatively, liberty is absence of restraint ; 
positively, it is the power to act and to enjoy. Now 
the restraints to action and enjoyment are not all 
political and legal ; consequently the individual may 
possess the fullest immunity from governmental in- 


terference, and yet be hindered by some other re- 
straints, such as, the strength, cunning, or selfish- 
ness of his fellows, from doing and enjoying those 
things that are essential to reasonable life. When- 
ever this happens, the absence of State intervention 
means the presence of insuperable obstacles to real 
and effective liberty. In a word, political and legal 
freedom are not an adequate safeguard to the wel- 
fare of the individual. As the Comte de Mun told 
the French Chamber of Deputies : "Liberty does not 
consist in a theoretical right, but in the possibility 
of exercising it. The power to be free, in a regime 
which puts the workingman's life at the mercy of 
supply and demand ; which exposes himself, his wife, 
and his children to the hardships of a competition 
that knows no moderation; which sets no limit to 
his exploitation except the interests of those who 
employ him, — the power to be free in such condi- 
tions, when the need of subsistence is so pressing as 
to permit of no waiting, no choice, no hesitation, 
does not exist and consequently the laborer is not 
free." ^ The economic history of the nineteenth 
century furnishes abundant proof of these state- 
ments, and an overwhelming refutation of the non- 
intervention theory. Perhaps the clearest and most 
logical instance is to be found in the conditions pre- 
vailing in the mines and factories of England before 
the passage of the Factory Acts. ^ 

Some of the opponents of State intervention in 

* Cited in Max Turman's "Le catholicisme sociale," p. loi. 
Cf. the excellent analysis in chap. XI of Ely's "Evolution of 
Industrial Society." 

* See the references given in chapter I. 



industry may be conveniently classed with the juve- 
nile bully who resents the "interference" of parent or 
teacher in his relations with younger and weaker 
boys, and with the burglar or highwayman who ob- 
jects to the activity of the policeman. These are 
the possessors of superior bargaining power who 
realize that if government will only let them alone 
they will be able successfully to exploit their weak- 
er fellows. Their opposition is natural in the same 
sense that selfishness is natural. Those who op- 
pose State regulation of industry on higher grounds 
than self-interest usually misconceive its concrete 
efifects. From this point of view, laws may b^ 
divided into two classes : Those w^hich actually re- 
strict the liberty of all or a majority of the citizens; 
and those which limit the freedom of all potentiallv, 
but of only a few actually. The first class regulates 
the simpler, more frequent, and more general activi- 
ties of everyday life, and puts some practical restric- 
tion on the freedom of nearly every person. Yet 
they bring to him more freedom than they take away. 
For example, the ordinance forbidding a man to 
monopolize the street or the sidewalk curtails to that 
extent his liberty, but secures him the larger liberty 
of immunity from the inconvenience that would be 
produced by similar unreasonable conduct on the 
part of his fellows. Jevons has well said that, "the 
modern English citizen who lives under the burden 
of the revised edition of the Statutes, not to speak 
of innumerable municipal, railroad, sanitary, and 
other by-laws, is after all an infinitely freer as well 
as nobler creature than the savage who is always 


under the despotism of physical want." ^ And the 
more numerous and complicated social relations be- 
come, the greater will be the necessity for regulation, 
and the larger will be the practical freedom that 
will result from wise regulation. The second class 
of restrictions applies theoretically to all the citizens, 
but practically impedes the liberty or activity of com- 
paratively few, because it has to do with actions that 
are beyond the reach of the great majority. A law 
that forbids one hundred persons to do something 
that ninety-nine of them could never have done in 
any event, will not deprive the ninety-nine of any 
valuable freedom. For instance, a statute compel- 
ling all employers of railway labor to pay a certam 
minimum of wages, or to carry goods and passengers 
at certain maximum rates, would limit the freedom 
of all persons who owned or operated railroads ; but 
since those who are or can hope to become employ- 
ers form but a small proportion of the whole number 
of persons engaged in and afifected by this industry, 
the liberty of the great majority would not be cur- 
tailed in any vital way. On the contrary, the latter 
section of the community would secure a wider 
measure of freedom in larger economic opportuni- 
ties. Now, it is to this class of regulations that all 
the more moderate proposals for increased State in- 
tervention belong. They would enlarge the con- 
crete freedom of the majority, and diminish that of 
the minority. They would afifect not so much the legal 
independence of the individual as the distribution of 

^"The State in Relation to Labor," p. 15. Cf. the keen 
criticism of the "police theory of the State" in Huxley's essay 
on "Administrative Nihilism." 



economic opportunities among different groups of 

As an abstract proposition, the State has both the 
right and the duty to compel all employers to pay a 
Living Wage. ^ The function of the State is to pro- 
mote the social welfare. The social welfare means 
in practice the welfare of all individuals over whom 
the State has authority ; and the welfare of the in- 
dividual includes all those conditions that assist in 
the pursuit of his earthly end, namely, the reasonable 
development of his personality. The primary busi- 
ness of the State, then, is to protect men in the en- 
joyment of those opportunities that are essential to 
right and reasonable life. They may be summed up 
in the phrase, natural rights. In addition to this, 
the State is charged with the obligation of promot- 
ing social prosperity. That is to say, its task is not 
merely to provide men with the opportunities that are 
absolutely essential to right living, but also to fur- 
nish as far as practicable the conditions of wider and 
fuller life. Since man's capacity for progress is 
indefinite, the State will fail in its mission of further- 
ing social welfare unless it does something toward 
securing to him the external conditions of something 
more than the minimum of reasonable personal de- 
velopment. State activity in the first sense is main- 
ly protective and restrictive ; in the second, auxiliary 
and co-operative. - Now, a law requiring employ- 

^ Cf. Vermeersch, "Quaestiones de Justitia," pp. 581, 582; 
Lehmkuhl, "Theologia Moralis," I, p. 715, gth ed. ; Pottier, 
"De Jure et de Justitia," pp. 262, 263 ; Pope Leo XIH, Encyc- 
lical on the Condition of Labor. 

' For discussions of the functions of the State, see : Bou- 
quillon, "Theologia Moralis Fundamentalis," pp. 445-450, 3d 



ers to pay a Living Wage would evidently be an in- 
stance of State activity in the primary sense, for it 
would be an attempt to protect natural rights, and 
to provide one of the essential conditions of reason- 
able human life. Even those who hold that the sole 
function of the State is to safeguard individuals 
against violence and injustice, in other words, to 
protect life and property, could logically admit that 
the enactment of such a law would not be an undue 
exercise of power. To compel a man to work for 
less than a Living Wage is as truly an act of injus- 
tice as to pick his pocket. In a wide sense it is also 
an attack upon his life. An ordinance prohibiting 
this species of oppression would, therefore, be a 
measure for the protection of life and property. 

The question of the legal enforcement of a Living 
Wage is, consequently, one of expediency. It has 
two distinct phases. We may ask whether a uni- 
versal Living Wage is economically feasible; and, 
supposing it to be workable, whether legal enactment 
could bring it about. The former inquiry does not 
concern itself with the productive resources of the 
country, since, as we have already seen, these are 
ample to supply all the inhabitants with the requisites 
of a decent livelihood, but with the consequences 
that might be expected to follow the establishment 
of a universal Living Wage in our present industrial 
system. The difficulties that it suggests remain 
substantially the same whether this condition be at- 
tained through Trade Union action, the payment of 

ed. ; Willoughby, "The Nature of the State," passim ; and Lilly, 
"First Principles in Politics," passim. 


sufficiently high prices by consumers, or legal enact- 

This question is frequently answered in the nega- 
tive, on the ground that if all the laborers who are 
at present underpaid were to receive a Living Wage, 
there would be such a rise in the price of the goods 
and services that they produce as to cause a cor- 
responding decline in demand. Instead of insuffi- 
cient wages, we should have the evil of insufficient 
employment. President Hadley says that society, 
that is, the consuming public, regards the making 
of a certain amount of product as worth only so 
much, and if compelled to pay more will diminish 
the quantity that it consumes. ^ Professor Smart 
maintains that the decreased demand would result 
in the laborers being put on short time, so that their 
Living Wage would prove a misnomer. ^ President 
Hadley's contention is true in a general way, but it 
is subject to two important qualifications. It im- 
plies, or at least will seem to many to imply, that the 
consumers look upon the low prices at which certain 
products sell as a full and precise equivalent of the 
fixed and necessary "worth" of these articles; and 
it easily leads to an exaggerated idea of the part 
taken by consumers in creating these prices. Why 
do consumers regard certain products of underpaid 
labor as worth no more than they now sell for ? Be- 
cause the low wages resulting from excessive com- 
petition among both employers and workers have 
enabled these prices to become customary. As 

* "Economics," sec. 406. 

* "Studies in Economics," pp. 50-60. 



Professor Smart points out, the proposition that 
women's wages are low because the goods that they 
turn out are cheap, puts — so far as the question of 
primary causality is concerned — "the cart before the 
horse." The initiative in reducing prices comes 
from the producers not from the public. Once 
prices are down, however, the public accepts them 
so eagerly that to raise them and the low wages 
underlying them, constitutes a very difficult prob- 
lem. ^ This is the explanation of low prices and the 
real significance of the consumer's estimate of the 
"worth" of low priced goods. President Hadley 
would, indeed, be one of the first to subscribe to this 
view, but his language in the section referred to 
above can be construed in support of an exaggerated 
notion of the rigidity and significance of the evalua- 
tions made by the consumer. That society regards 
the prices that it pays for cheap goods as an "equiva- 
lent" of the labor expended in producing them, is 
true in the sense that it will not voluntarily offer to 
pay more ; it is not necessarily true in the sense that 
society would not pay more for these goods rather 
than do without them. And this brings us to the 
second qualification to be made concerning President 
Hadley's statement, and likewise with regard to that 
of Professor Smart. A rise in the price of an arti- 
cle will always be followed by a falling off in the 
demand for it, other conditions remaining unchanged. 
If, however, it is accompanied by a corresponding 
increase in the purchasing power of consumers, 
actual and potential, there need be no diminution in 
* "Studies in Economics," pp. 1 19-122. 


the amount sold. The prices of most of the neces- 
sities of life have risen greatly in the last seven years, 
yet the effective demand for them has not decreased. 
The contrary has, in fact, occurred, thus exemplify- 
ing the general rule that high prices mean greater 
industrial activity and a smaller volume of unemploy- 
ment. Whether the establishment of a Living Wage 
in all the industries in which it does not now exist 
would bring with it sufficient demand to continue or 
increase the number at present employed, cannot be 
mathematically determined beforehand. This much, 
however, may be confidently affirmed : of the actual 
and potential consumers affected, the richest section 
would probably buy as much as they did before 
prices rose ; another section would certainly re- 
duce its consumption ; some of the laborers former- 
ly underpaid would increase their consumption ; and 
some of them would become consumers of these 
particular goods for the first time. Hence the 
effect of a rise in prices consequent upon the uni- 
versal application of the Living Wage principle 
would be less simple as well as less serious than the 
statements of the above-mentioned writers seem to 

A second objection is drawn from the assumption 
that even though the higher range of prices should 
cause no decrease in demand or in employment, it 
would swallow up completely the rise in remunera- 
tion. What the laborer gained in wages he would 
lose in the higher cost of living. To put it technical- 
ly, there would be a rise in nominal but not in real 
wages. Sidney and Beatrice Webb have carefully 

20 30s 


examined this contention and given a thoroughly 
satisfactory reply : "Mr. Herbert Spencer, in the con- 
cluding volume of his Synthetic Philosophy, naively 
makes this his one economic objection to Trade 
Unionism. 'If,' he says, 'wages are forced up, the 
price of the article produced must presently be 
forced up. What then happens if, as now. Trade 
Unions are established among the workers in nearly 
all occupations, and if these Unions severally succeed 
in making wages higher ? All the various articles they 
are occupied in making must be raised in price ; and 
each Trade Unionist, while so much the more in 
pocket by advanced wages, is so much the more out 
of pocket by having to buy them at advanced rates.''- 
But this is to assume that the wage earners purchase 
as consumers the whole of the commodities and serv- 
ices which they produce. We need not remind the 
reader that this is untrue. In the United Kingdom, 
for instance, though the wage earners number four- 
fifths of the population, they consume — to take the 
highest estimate — only between one-third and two- 
fifths of the annual aggregate of products and 
services, the remainder being enjoyed by the prop- 
ertied classes and brain workers. Even if a gen- 
eral rise in wages, amounting to, say, fifty million 
sterling, produced a general rise in prices to the ex- 
tent of fifty million sterling, spread equally over all 
products, it could not be said that the wage earners 
as a class would have to bear on their own purchas- 
es more than one-third to two-fifths of the addition- 
al price. If the rise in price was not spread equally 

* "Industrial Institutions," London, 1896, p. 536. 


over all commodities and services, but occurred only 
in those consumed by the other classes, the rise in 
wages would have been a net gain to the wage 
earners. Only in the impossible case of the rise 
occurring exclusively in the commodities consumed 
by the wage-earning classes — these commodities 
being as we have seen, only one-third to two-fifths 
of the whole — would that class find its action in 
raising wages nullified in the simple manner that 
Mr. Spencer imagines? Hence, it is, that even if a 
rise in the Standard of Life of the whole wage-earn- 
ing class produces an equivalent general rise in the 
price of commodities, the result must nevertheless 
be a net gain to the wage earners." ^ With some 
difference of degree, this analysis describes the 
bearing of any rise in the price of their products up- 
on that section of the American working class that 
is at present underpaid. They are not the sole con- 
sumers of their products ; hence a part of the rise 
must be borne by others. Nor would these other 
consumers, — laborers, salary-receivers, professional 
classes, farmers, landowners, employers and capital- 
ists, — be able to recoup by raising the price of their 
products and services to such an extent that the net 
gains of the heretofore underpaid workers would 
all be absorbed in the additional price that they would 
have to pay for the same amount of these products 
and services as they formerly consumed. The 
workers whose remuneration was raised to the Liv- 
ing Wage level would not be in the same condition 
of economic advantage, or disadvantage relatively to 
^"Industrial Democracy," 1st ed., pp. 781, 782, note. 


other economic classes as they were before the rise. 
There is no more reason for expecting this outcome 
than there was for the prediction, formerly made, 
that all the gains effected by Trade Union action 
would be neutralized by the higher prices that the 
Unionists would be obliged to pay as consumers. As 
a matter of fact, group after group have through 
organization obtained increases in wages, without 
suffering anything like an equivalent loss in the 
purchasing power of their individual dollars. Ex- 
perience has shown that whenever one economic 
class has gained in money income at the apparent 
expense of other classes, a part of the gain has been 
not merely nominal, and a part of it has been not 
only in appearance but in fact at the expense of the 
other classes. 

Thus far the discussion of both of the objections 
that we have been considering, has proceeded on the 
assumption that the rise in prices would be fully 
equivalent to the rise in wages. The assumption 
concedes too much. Part of the increased labor 
cost would come out of interest ; part out of profits ; 
part out of the saving effected through the elimina- 
tion of incompetent employers ; and part out of the 
increased efficiency of both labor and capital. Some 
of the employers who found it impossible to pay a 
Living Wage and at the same time obtain the usual 
rate of interest on their own capital invested in the 
business, would content themselves with a some- 
what lower rate. They would do this rather than 
go out of business. Some of those who were un- 
able to pay the old rate on borrowed capital would 



offer a lower rate, thereby lessening the demand for 
capital and exerting a downward pressure on the 
rate of interest. And this downward pressure would 
be reinforced by the action of those capitalist-em- 
ployers who withdrew from business and threw 
their capital on the market rather than accept a 
smaller return from their investment. Moreover, 
since competition is never perfect, and since some 
business men do get money more cheaply than oth- 
ers in similar circumstances, some of the borrowers 
whom we are considering would succeed in renew- 
ing their loans at a lower rate than that which gen- 
erally prevailed. Some lenders would submit to 
this condition in preference to the risk of faring 
worse elsewhere. Finally, there are some employ- 
ers who would be able and willing to take a part of 
the added labor cost out of their personal profits. 
That is, they would be willing to do so rather than 
cease to be employers or attempt to saddle all the in- 
creased expense on the selling price of the product. 
To deny these general statements concerning the 
capitalist-employer, the loan-capitalist, and the em- 
ployer in his capacity of profit receiver, is to contend 
that all the individuals of these three classes would 
absolutely refuse to accept a lower return for their 
money or their activity than they now obtain. It 
is to maintain that of all the agents of production 
only the laborer will ever submit to a reduction in 
his share of the product. Needless to say, this 
theory is contradicted by experience. Both interest 
and profits have fallen, and there is no good reason 
to think that they have already reached an irredu- 


cible minimum. On the contrary, it is practically 
certain that the general rate of interest must, inde- 
pendently of the Living Wage question, suffer a 
further decline. Perhaps a majority of the small 
employers would not, or could not, continue their 
present functions if their personal returns were 
diminished; but this is by no means the case with 
all. The situation in which employers who were 
compelled to raise the compensation of their under- 
paid employees to the plane of a Living Wage would 
find themselves, is this : the sources from which the 
additional wage-payments can be drawn are only 
three, namely, the selling price of the product, in- 
terest, and profits. Now the difficulty of raising 
prices to a level sufficiently high — and of maintaining 
them there — to provide for all the increased labor 
cost, is so great that many employers will find it 
easier and more satisfactory to secure a portion of 
the necessary funds from one or both of the other 
two sources. In the third place, some of the more 
competent or better situated employers at present 
pay substantially a Living Wage in circumstances 
and industries in which their competitors generally 
fail to do so, and could under other conditions take 
care of a large proportion of the business now car- 
ried on by the latter. When the Living Wage be- 
came universal they would not find it necessary to 
raise prices to any appreciable extent, while many of 
their less competent competitors would be forced to 
the wall. This "survival of the fittest" might pro- 
ceed so far that prices would ultimately reach the 
old level, owing to the satisfactory profits obtained 


by the "survivors" through the increased volume of 
sales. At any rate, it is certain that a large number 
of incompetent employers are now able to continue 
their functions, not because their services are needed 
by the community, but because they pay a smaller 
wage than their competitors ; and that the elimination 
of these from any cause whatever would reduce the 
total cost of production, and enable their labor 
force to find employment at better wages with the 
more competent employers. In the fourth place, a 
part of the increase in wages would be derived from 
the increased productivity of the industries in which 
the rise occurred. The higher wage enjoyed by the 
laborers would give them a higher physical and 
mental efificiency, and consequently a greater pro- 
ductive power, while the increased labor cost of pro- 
duction would compel business men to introduce 
better machinery and a better organization of in- 
dustry. ^ Most of the improvements of the last 
century in methods of production seem to have 
originated in the pressure exerted upon employers 
and by the demands of labor. ^ As long as they 
could secure the advantages of cheap production 
through cheap labor, employers generally declined 
to undertake the exertion, risk, and expense of dis- 
covering or introducing new processes. A similar 
condition obtains to-day in many of the industries 
in which labor is underpaid, and a similar course 
would be adopted by many employers if they found 
it no longer possible to hire workers for less than a 
Living Wage. 

^ Cf. Gunton's "Wealth and Progress," passim. 
' Cf. Webb, "Industrial Democracy," pp. 72^727, ist ed. 


In general, it may be said that the arguments 
against the economic feasibility of a universal Liv- 
ing Wage are reducible to two. The first is that the 
national product of food and other articles of neces- 
sity and comfort would not be adequate ; the second, 
that the machinery of distribution could not be so 
modified as to achieve the desired result. It is dif- 
ficult to see how any American economist can take 
the former contention seriously. As pointed out in 
an earlier chapter, our natural resources and pro- 
ductive capacity are more than sufficient to furnish 
the entire population with the requisites of a decent 
livelihood. And the preceding pages of this chapter 
have shown that the objections based on the difficulty 
of obtaining the required modification of the dis- 
tributive process are far from being conclusive. 
They can all be, and have been, urged against every 
effort that has ever been made, by Trade Union ac- 
tion or otherwise, to better the condition of any group 
of workers ; for they all turn on the supposed evil con- 
sequences of a higher cost of production and higher 
prices to the consumer. If there is any difference 
between the economic and social effects of the gains 
that labor has already struggled for and secured, 
and those that would result from the universal appli- 
cation of the Living Wage principle, it is a difference 
only of degree. Yet experience has shown that 
gains in wages invariably mean a real improvement 
in the condition of those obtaining them, and rarely 
involve any hardship worth considering to other 
classes or to the community at large. The discus- 
sion of this point may be fitly closed with a citation 


from two investigators of the very highest authority. 
"We desire to emphasize the point that, whatever 
poHtical objections there may be to the fixing by 
law of a National Minimum Wage, and whatever 
practical difficulties there may be in the way of car- 
rying it out, the proposal, from the point of viezv of 
abstract economics, is open to no more objection 
than the fixing by law of a National Minimum of 
Sanitation, or a National Minimum of Leisure, both 
of which are, in principle, embodied in our factory 
legislation. Indeed, a minimum wage, since it 
would in no way interfere with the fullest use of 
machinery and plant, or otherwise check productive 
ity, would seem to be even less open to economic 
criticism than a limitation of the hours of labor." ^ 

The obstacles to the legal enactment and enforce- 
ment of a Living Wage in America are great, but 
not necessarily insuperable. There is, in the first 
place, that perverse individualism which prefers 
irrational liberty and industrial anarchy to a legal 
regime of order and justice. This spirit is still 
sufficiently potent to render exceedingly difficult 
those changes in the Federal constitution and in the 
constitutions of the several states which would be 
a preliminary requisite to any such legislation. 
After the law had been enacted, the willingness of 
the unemployed, always numerous in the class affect- 
ed by the new statute, to sell their labor below the 

^ Sidney and Beatrice Webb in "Industrial Democracy," p. 
777, note, ist ed. Dr. Cunningham maintains that the verdict 
of political economy is in favor of rather than against the 
principle of a Living Wage. See his article in the "Con- 
temporary Review," vol. Ixv, p. i6. 


legal rate through fear of not obtaining employment 
otherwise, would constitute a serious menace to its 
successful enforcement. In the case of illegal agree- 
ments entered into from this motive, both of the 
contracting parties would be interested in violating 
the law. Nevertheless there are good grounds for 
believing that an honest and sustained attempt lo 
secure a Living Wage by legal enactment would meet 
with a fair measure of success. Public opinion is 
changing very rapidly in its attitude toward govern- 
ment regulation of industry, and especially with re- 
gard to the question of legislative repression of 
abuses. It is coming to see that unregulated com- 
petition has proved itself inadequate to protect the 
consumer against monopoly and extortionate prices, 
and the producer against exploitation and starva- 
tion wages. Very probably a large majority of the 
voters of the country agree with President Roose- 
velt that, if the Federal Government does not now 
possess the power to regulate corporations adequate- 
ly, the National Constitution ought to be changed 
accordingly. Once an amendment of this character 
has been effected, constitutional modifications em- 
powering congress and the state legislatures to pass 
a minimum wage law, could readily be obtained. 
Thus the greatest of the obstacles to a Universal 
Living Wage by legal enactment would have disap- 
peared. After the law had been placed on the 
statute books, organized labor and a large section of 
the underpaid workers who were not organized 
would be vitally and actively interested in its en- 
forcement. The penalties attached to its violation 


could be made sufficiently heavy to deter all but the 
boldest employers and the most reckless working- 
men. Even if it were observed in the case of, say, 
only one-fifth of the workers previously underpaid, 
there would be so much gained, and according as 
the public came to realize the reasonableness and 
necessity of the new legislation, the proportion of 
instances in which it was violated would rapidly de- 
crease. Owing to differences in the cost of living 
and other conditions, the greater part of such legisla- 
tion would have to come from the several states 
rather than from the National congress. Its terms 
in detail and its enforcement could best be deter- 
mined and secured through a commission, empow- 
ered to adjust it to different industries and different 
centres of population. Precisely the same principle 
is embodied in the legislation which at present au- 
thorizes state railway commissions to fix reasonable 
rates for the transportation of passengers and 
freight. Their power to lay down maximum rates 
on the basis of a reasonable return from investments 
is at bottom the power to limit, indirectly, of course, 
the incomes of the stockholders. The wage-commis- 
sions would attack the opposite extreme of industrial 
injustice by fixing a minimum rate of remuneration 
for the workingmen. 

The principle of a Living Wage by legal enactment 
is already being tested in the Minimum Wage Board 
law of Victoria, Australia, and in the provision of 
the Conciliation and Arbitration act of New Zealand 
which empowers the court of arbitration to prescribe 
a minimum wage in any industry in which it makes 



an award. ^ In the former region it has been found 
that when a fair average wage is fixed as the mini- 
mum, competition among employers to get the best 
possible hands for the money throws the less com- 
petent out of employment. Through fear of not 
obtaining work otherwise, many of the workers 
whose efficiency is fully up to the average represent 
themselves as disqualified by "age or infirmity" from 
earning the minimum wage, and secure a legal per- 
mit to sell their labor for less ; while others contract 
for the legal rate, but return a part of their wages to 
the employer. Similar evasions of the law have 
been practised in New Zealand, though, it seems, in 
a smaller proportion of cases. Now it is obvious 
that any law requiring the payment of a minimum 
rate of wages must include some provision whereby 
workers of less than normal efficiency can obtain 
legal authorization to accept a smaller remunera- 
tion. Whenever the supply of labor is in excess of 
the demand at the legal rate, some of the able-bodied 
workers will, consequently, attempt to take ad- 
vantage of the provision by unlawful practices. Il- 
legal and secret agreements to give back a portion of 
the wages to the employer will likewise be inevitable. 
Yet the number of evasions of the law from these 
two causes will — if any reasonable endeavor is made 
to enforce it — ^be much smaller than the number of 
cases in which less than the minimum rate would be 
paid if the law did not exist. To put it the other 
way, the proportion of workers obtaining the rate 

^ See the articles by Dr. Victor S. Clark in the Bulletins of 
the Bureau of Labor: No. 56, pp. 60-78; and No. 49, pp. 



fixed as the legal minimum will be much larger with 
the law than without it ; for in the latter case there 
would be nothing to hinder employers from hiring 
the whole body of efficient laborers at a lower rate 
but purely economic forces, while in the former case 
there would be the additional obstacle set up by the 
legal prohibition. And the objection that some men 
will always evade the law by handing back a part of 
their pay to the employer in the form of rebate, ap- 
pHes with equal force to the Union scale, which is 
really a minimum below which the Unionist is for- 
bidden to go; but no well-informed person rejects 
on this account the principle of Unionism, or denies 
that it has benefited the laborer. The practical 
question is not whether a minimum wage law would 
be violated — all legal enactments are violated in 
some degree, — but whether it would not raise to the 
level of decent living many who would otherwise be 
forced to remain in a condition of economic wretch- 
edness. As a matter of fact, the net results of the 
law in both Victoria and New Zealand seem to be an 
ample justification of its wisdom. "A fair examina- 
tion of the Victorian minimum wage law," says Dr. 
Victor S. Clark, ''must include the statistical evi- 
dence as to its general effect upon wages and em- 
ployment and the testimony as to its influence on 
the general condition of the worker. If nobody had 
been benefited by the law, it would hardly have sur- 
vived nine years of amendment and legislative at- 
tack There has been a general increase in the 

pay of male labor equivalent to nineteen per cent., 

and of female labor to seventeen per cent., or about 



5s. 9d., and 2S. 3d. ($1.40 and $0.55) per week, 
respectively, in occupations under the determinations 
of the boards." ^ Speaking of the arbitration law 
of New Zealand, an important feature of which is 
the provision fixing a minimum wage, the same 
writer says : "With all its apparent defects the act is 
a success beyond the expectation of many of its 
early supporters." ^ 

Until such time as a general Living Wage law be- 
comes a reality, the State could apply the principle 
partially. The various legislative authorities, na- 
tional, state, and municipal, should enact legislation 
providing that all adult employees in the public serv- 
ices, or employed by private firms on work done by 
contract for the public, receive a wage adequate to 
the decent maintenance of themselves and their fami- 
lies. While the number of laborers affected by the 
law would be comparatively small, the moral effect 
on public opinion and on purely private wage con- 
tracts would be very considerable. Similar legisla- 
tion could without difficulty be enacted and success- 
fully applied to all quasi-public industries of a 
monopolistic character, such as, railroads, street rail- 
ways, and telegraph, telephone and express com- 
panies. Professor T. S. Adams maintains that a 
compulsory arbitration law — which would necessar- 
ily include the power to determine rates of wages — 
covering these industries is immediately feasible. ' 
When it is recalled that in the highly prosperous 
year of 1903 more than three-fourths of a million 

^Bulletin No. 56 of the Bureau of Labor, pp. 70, 71. 
" Bulletin No. 49 of the Bureau of Labor, p. 1255. 
* "Labor Problems," pp. 325-331- 



adult males in steam railway occupations received 
less than a Living Wage, the direct benefits to be 
derived from this partial extension of the Living 
Wage principle are readily perceived. 

Several indirect methods may be mentioned 
through which the State could extend the field in 
which a Living Wage would prevail. The first is 
legislation limiting the working day to eight hours, 
and fixing the minimum age at which children would 
be permitted to become wage earners at sixteen 
years. The immediate effect of these measures 
would be a diminution in product, and an increase 
in the demand for labor. An increase in the price 
of labor — a rise in wages — would follow necessarily.^ 
In general, the objections offered to this argument are 
identical with those urged against a universal Living 
Wage, namely, an increased cost of production and 
a rise in the price of the finished product. They 
will not be reconsidered in detail here. President 
Hadley and Mr. John Rae argue that if a universal 
eight hour regime is followed by a lessening in the 
per capita production of the laborer, the diminished 
product will but increase the number of those re- 
ceiving insufficient sustenance. ^ Mr. Rae's conten- 
tion that individual wealth cannot be increased by 
diminishing individual production, is in one sense a 
mathematical truism ; as an abstract and general 
statement, it is untrue. A smaller product may be 
so distributed that some individuals will receiv^e 
more than they did when the product was larger. 

* Cf. Gunton, "Wealth and Progress," pp. 240-265. 

* Hadley, "Economics," sees. 450-454 ; Rae, "Eight Hours 
for Work," chs. V and VI. 



The curtailment of production and increase of in- 
dividual profits that sometimes follow the consolida- 
tion of competing establishments into a trust, affords 
a familiar illustration. It cannot be too often re- 
peated that with our present abundance of natural 
and industrial resources, actual and potential, the 
question of raising the remuneration of the under- 
paid is only in a very minor degree a question of 
production. It is almost wholly a question of dis- 
tribution, of enabling one group of individuals to 
secure a portion of the national product that is now 
regularly obtained by other groups. "When ma- 
chinery is replacing man and doing the heavy work 
of industry, it is time to get rid of the ancient pre- 
judice that man must work ten hours a day if he is 
to keep the world up to the level of the comfort that 
it has attained. Possibly, if we clear our minds of 
cant, we may see that the reason why we still wish 
the laborer to work ten hours a day is the fear that 
we, the comfortable classes, may not go on receiving 
the lion's share of the wealth which these machines, 
iron and human, are turning out." ^ 

Two other methods of State action to which at- 
tention will be called are housing and old age pen- 
sions. "No problem," says a recent writer, "presents 
so many startling aspects as the problem of the hous- 
ing of the working people." The overcrowded con- 
dition in which so many of them are forced to exist 
involves the "destruction of home life, weakening 
of parental influence, falling off of religious faith, 
changed relation of the sexes, absence of privacy, 

^ Smart, "Studies in Economics," p. 328. 


intrusion of strangers upon the family life, the use 
in common of facilities of living where propriety 
and decency demand the restriction to a single fam- 
ily, the constant sight and sound of debasing influ- 
ences from which escape is impossible." ^ The 
State could build dwellings and sell them to the 
worst off of the underpaid workers for less than 
cost, on condition that they be paid for in small in- 
stallments without interest. The direct gain in com- 
fort to the beneficiaries of this action is obvious ; the 
indirect gain in the form of self-respect, self-con- 
fidence, hopefulness, and courage, ambition and 
ability to contend for better wages and a higher 
economic position, would be of even greater im- 
portance. Finally, the State ought to give every 
laborer who has become permanently incapacitated 
for work through old age, and whose wages have 
not been sufficient to make provision for his declin- 
ing years, an annual pension. The man that has toiled 
faithfully during all the vigorous portion of his life 
has a valid cl^im against society for this amount. 
It is, in fact, a part of the Living Wage that is due 
him for his life work. A system of old age pensions 
would, moreover, afford considerable relief to many 
underpaid and moderately-paid workers who are now 
burdened with the support of relatives that are no 
longer able to earn their own living. Freed from this 
charge, many of the former would enjoy a Living 
Wage in the full sense of the phrase, while others 
would approach it much more closely than they do 

^ "The Housing Problem in American Cities," by Lawrence 
Veiller, "Annals of the American Academy of Political and 
Social Science," March, 1905. 

31 321 


at present. State relief of the incapacitated has be- 
come an especially urgent problem in this machine 
age, when the laborer's working life comes to a 
close so much earlier than formerly. ^ 

These forms of State assistance would, of course, 
entail a heavy financial burden and increased taxa- 
tion. One method of providing the required funds 
may be briefly touched upon because of its general 
bearing on the problem of distribution. A progres- 
sive tax on incomes and inheritances could be so 
framed as to furnish the means of carrying out the 
projects of housing and old age pensions on a very 
large scale. The rate on inheritance would naturally 
be higher than that on incomes. Speaking of the 
former method of taxation, Andrew Carnegie has 
written : "Of all forms of taxation, this seems to be 
the wisest. Men who continue hoarding great sums 
all their lives, the proper use of which for public ends 
would work good to the community, should be made 
to feel that the community in the form of the State, 
cannot be deprived of its proper share. By taxing 
estates heavily at death the State marks its con- 
demnation of the selfish millionaire's unworthy life. 

"It is desirable that nations should go much furth- 
er in this direction. Indeed, it is difficult to set 
bounds to the share of a rich man's estate which 
should go at his death to the public through the 
agency of the State, and by all means such taxes 
should be graduated, beginning at nothing upon 
moderate sums to dependents, and increasing rapidly 

* Ct. The Final Report of the Industrial Commission, p. 733 ; 
and Hobson's "Evolution of Modern Capitalism," ch. IX. 



as the amounts swell, until of the millionaire's hoard, 
as of Shylock's, at least 

'* * * The other half 

Comes to the privy coffer of the State.' " * 
The argument for a graduated tax, increasing in 
rate with the size of the estate, is as valid in the 
case of incomes as in that of inheritance. In both, 
the rich man is compelled to give up to the com- 
munity a larger percentage of his wealth than the 
man of moderate means because the richer a man is, 
the less hardship does he suffer when his possessions 
are diminished by a given fraction. If it be objected 
that to apply the proceeds of these forms of taxation 
to the purposes here advocated, is to take from the 
rich and give to the poor, the charge may be passed 
over as correct in substance. It implies, however, 
a false notion of the morality of the proposal. The 
State is bound not only to protect its citizens in the 
enjoyment of their natural rights to the effective 
opportunity of gaining a decent livelihood by their 
labor, but to compensate, as far as practicable, those 
persons for whom it has failed to provide such op- 
portunity. For this purpose taxes must be levied, 
and they should be apportioned in accordance with 
the resources of the citizens. ^ 

^"The Gospel of Wealth," pp. ii, 12. 

* Socialism is not considered among the methods of State 
activity for two reasons : first, because the discussion is con- 
fined to the rights and obligations that rise out of the v/age- 
system of industry ; and, second, because the writer does not 
believe that Socialism is either practicable or desirable. 



Summary and Conclusion 

Resume of the main argument. Three important con- 
clusions: (a) a complete scheme of distributive justice 
is exceedingly difficult to formulate; (b) a universal Living 
Wage would mean an immense improvement in social and 
industrial conditions; and (c) the realization of it is less 
difficult than the realization of any other plan that would 
yield equal results. 

The main argument of this volume may be sum- 
marized as follows: the laborer's right to a Living 
Wage is the specific form of his generic right to ob- 
tain on reasonable conditions sufficient of the earth's 
products to afford him a decent livelihood. The 
latter right is, like all other moral rights, based on 
his intrinsic worth as a person, and on the sacredness 
of those needs that are essential to the reasonable 
development of personality. Among the things to 
which these needs point there is included a certain 
amount of material goods. A man's right to this 
indispensable minimum of the bounty of nature is 
as valid as his right to life : the difference is merely 
in degree of importance. Now when the man whose 
social and economic function is that of a wage earn- 
er has expended all his working time and energy in 



the performance of some useful task, he has fulfilled 
the only condition that in his case can be regarded 
as a reasonable prerequisite to the actual enjoyment 
of his right to a decent livelihood. The obligation 
of providing him with the material means of living 
decently rests in a general way upon all his fellow 
men. That is to say, they are all under moral re- 
straint not to do anything that would be an unreason- 
able interference with his access to these means. 
However, it is only those persons who are in control 
of the goods and opportunities of living that are 
practicably within his reach, who can effectively 
hinder or promote his enjoyment of the right in 
question. When they prevent him from peaceably 
getting possession of the requisite amount of goods, 
they are morally responsible for his failure to obtain 
a decent livelihood. Their action is as unjust as that 
of the majority of the first occupants of a No-man's 
Land who should force the minority to work for a 
bare subsistence. This specific obligation of the 
class of persons that we are considering falls prima- 
rily upon the employer ; for his economic position as 
direct beneficiary of the laborer's exertion and as 
payer of wages, renders this the only practicable 
outcome of any reasonable division of the com- 
munity's opportunities of living and of the corre- 
sponding responsibilities. Nor can the employer 
escape this duty of paying a Living Wage by taking 
refuge behind the terms of a so-called free contract. 
The fact is that the underpaid laborer does not tvUl- 
ingly sell his labor for less than the equivalent of a 
decent livelihood, any more than the wayfarer will- 



ingly gives up his purse to the highwayman. It is 
the superior economic force (which consists essen- 
tially in the ability to wait, while the laborer must go 
to work to-day or starve) possessed by the employer 
that enables him to hire labor for less than a Living 
Wage. And the employer who can afford to pay a 
Living Wage is no more justified in using his supe- 
rior economic strength in this way than he would be 
justified in using superior physical strength to pre- 
vent the laborer from taking possession of a sack of 
flour or a suit of clothes that the latter had bought 
and paid for. In both cases the laborer is deprived 
by superior strength of something to which he has 
a right. As a determinant of rights, economic force 
has no more validity or sacredness than physical 
force. The other economic classes in the commun- 
ity, the landowner, the loan-capitalist, the consumer, 
and the man of wealth, share the responsibility of 
providing the laborer with a decent livelihood in a 
secondary degree, and in accordance with the nature 
and possibilities of their several economic positions. 
Finally, the State is morally bound to compel em- 
ployers to pay a Living Wage whenever and wher- 
ever it can, with a moderate degree of success, put 
into effect the appropriate legislation. 

The discussion carried on and the considerations 
suggested in the preceding chapters point to three 
important conclusions which may briefly be set down 
here. The first is that the determination of complete 
justice in the field of economic distribution is be- 
wilderingly difficult. According to the view of the 
writer, the order of importance among the various 


canons of distributive justice is as follows : the needs 
of the worker ; the cost of preparation for tasks re- 
quiring skill of any kind ; the legitimate risks of nec- 
essary business enterprises ; the proportion of individ- 
ual energy expended by the worker ; the disagree- 
ableness of the work ; the productivity of labor ; and 
the productivity of property, whether land or capital. 
Most persons would probably agree that in any com- 
pletely just scheme of distribution all of these factors 
would have to be taken into account, but not all who 
accepted the list would subscribe to this order. And 
those who accepted this order, or any other order, 
would find it well-nigh impossible to determine in 
any particular case the precise degree of importance 
that ought to be attributed to one factor, or canon, 
relatively to the others. For example, men might 
agree that disagreeableness of work is a higher title 
to wages than productivity, and yet disagree as to the 
precise ratio of importance that should be held to 
exist between these two standards. Even if all the 
difficulties involved in the problem of a completely 
just remuneration of the different agents of produc- 
tion were removed, there would still be the question 
of the just claims of the consumer. Are all the bene- 
fits resulting from improvements in production to 
go to the agents of production? or, should the con- 
sumer share them in the form of lower prices? and 
if so, in what proportion? Here we have a conflict 
between the productivity of the producers and the 
needs of the consumers which will occur continuous- 
ly, and for the adjustment of which it is practically 
impossible to lay down objective rules. 


Tne second conclusion to be drawn is that the 
universal application of the Living Wage principle 
would cause an immense improvement in our in- 
dustrial and social conditions. It would mean an 
increase in various degrees, in the remuneration of 
more than sixty per cent, of the male adults em- 
ployed in urban occupations, or, probably, seventy 
per cent, of those 'n all occupations. It would go 
very far toward rei loving those plague spots of our 
cities in which thousands upon thousands of human 
beings are able to obtain only a fraction of the 
requisites of physical health and comfort, and are 
foredoomed from infancy to mental and moral de- 
generacy. Of the millions who are now above these 
lowest economic depths and yet below the plane of a 
decent livelihood, thousands would be freed from 
the necessity of working at an age at which they 
ought to be in school ; thousands who at present can 
command only the bare necessities of living would 
realize for the first time the meaning and the bless- 
ings of moderate comfort; thousands of men who 
are able to provide for the present wants of them- 
selves and families, but can lay by nothing for the 
contingencies of the future, would be lifted out of 
this depressing condition; and thousands of young 
men who cannot now contemplate marriage would 
be able to become heads of families and live as nor- 
mal human beings. For a large proportion of those 
who are at present underpaid, a Living Wage would 
prove a stepping-stone to a still higher condition. 
Our "perpetual danger of overproduction" would be 
greatly diminished, owing to the enlarged consuming 



power of the wage-earning class. For the same rea- 
son a demand would be created for the services of 
the greater number of these who are now constantly 
unemployed. Finally, the nation's gain in physical, 
mental and moral health, and in the increase of con- 
tentment and good feeling among its citizens, would 
ensure its continued pre-eminence among the world's 
happiest, most vigorous, and most progressive peo- 

In the third place, it may be safely asserted that 
an earnest and systematic endeavor to extend the 
Living Wage principle throughout the entire field of 
industry, would be followed by a larger measure of 
beneficial results than any other method of industrial 
reform that could be pursued. The means that may 
be efficaciously employed in this endeavor are briefly, 
mor?l suasion and social effort. Both of them 
are now unduly magnified and now unduly mini- 
mized by partizan advocates. We are not in- 
frequently assured that, "only religion will solve the 
labor question." Most certainly it will not be per- 
manently and adequately solved zvithout religion, 
that is, without the aid of religious agencies and a 
larger infusion of the religious spirit into the minds 
and hearts of men ; but neither will religion suffice in 
the absence of a detailed application of moral prin- 
ciples to the relations of employer and employee. 
Men may be religious in the ordinary meaning of the 
term, and yet remain so thoroughly dominated b)' 
the ethical code of unlimited competition that they 
are blind to the many forms of moral wrong which 
that code sanctions. There are thousands of employ- 



ers in every church organization who wish to live up 
to the standards of their respective denominations, 
and believe that they are succeeding fairly well, who 
nevertheless feel no conscientious scruples when they 
pay their employees much less than a Living Wage. 
They see no wrong in this, for are they not paying 
the current rates? In other words, they conform to 
the standard of business ethics, instead of to the 
standard of Christian ethics. The moral suasion 
that will produce results implies earnest, continu- 
ous, and enlightened activity on the part of public 
teachers and moulders of public opinion. If clergy- 
men would give as much attention to preaching and 
expounding the duty of paying a Living Wage as 
they do to the explanation of other duties that are 
no more important, and if they would use all the 
power of their ecclesiastical position to deprive recal- 
citrant employers of the church privileges that are 
ordinarily denied to persistently disobedient mem- 
bers; and if public speakers and writers who dis- 
cuss questions of industrial justice would, in concrete 
terms, hold up to public denunciation those employ- 
ers who can pay a Living Wage and will not, — the 
results would constitute an ample refutation of the 
libelous assertion that employers cannot be got to 
act justly by moral suasion. They have never been 
made to feel a fraction of its power. The term, 
social effort, is here used to describe the activity both 
of private associations, such as Labor Unions, and of 
the State. It is true that the efficiency of social 
effort is limited by the character of the individuals 
through whom the effort is made. If individuals 


have not an intelligent grasp of the ethical principles 
involved in the Living Wage question, and the will to 
apply these principles in practice, their achievements 
as an organization will be seriously diminished. But 
it is also true that organized effort will add very 
materially to the results that can be accomplished 
through moral suasion addressed to individuals. 
This very obvious general truth is superlatively true 
in our time, when man's social relations have be- 
come so numerous and so complex. Both methods 
are necessary. There must be an appeal to the 
minds and hearts of individuals, and the fullest 
utilization of the latent power of organization and 
social institutions. A reasonable and sustained en- 
deavor to employ the two methods in extending the 
Living Wage principle will accomplish more for the 
laboring class, especially for its poorest-paid mem- 
bers, than a like amount of effort expended in any 
other way. Speaking comparatively, the remedy is 
efficacious, and the means of putting it into effect 


The subjoined list does not profess to be a com- 
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Stephen, Leslie, Social Rights and Duties, New York, 

Sterrett, J. M., The Ethics of Hegel, Boston, 1893. 

Tanquerey, A., De Justitia, New York, 1904. 

Taparelli d' Azeglio, Le droit naturel, Paris, 1883. 

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Vermeersch, A., Quaestiones de Justitia, Bruges, 1901, 

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Ashley, W. J., English Economic History, London, 

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Atkinson, Edward, The Distribution of Products, New 

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Block, Maurice, Les progres de la science economique 

depuis Adam Smith, Paris, 1890. 
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Translated by W. Smart, New York, 1891. 
Bolen, G. L., Getting a Living, New York, 1903. 



Bonar, James, Philosophy and Political Economy, Lon- 
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Bosanquet, Mrs. B., The Standard of Life, London, 1898. 

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Brooks, John G., The Social Unrest, New York, 1903. 

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Cannan, Edward, Theories of Production and Distribu- 
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Carlyle, Thos., Past and Present, New York, 1872. 

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Abstinence, and interest, 258- 

Adams, T. S., on labor organi- 
zations, 292, 293; on compul- 
sory arbitration, 318. 

Antoine, C, on a Living Wage, 
85, 86, IIS- 

Aquinas, St. Thomas, on just 
wages, 28; right to subsist- 
ence, 69; ownership, 107; 
superfluous goods, 271. 

Aristotle, on ownership, 70. 

Ashley, W. J., on medieval regu- 
lation, 26; medieval criterion 
of fair wages, 94. 

Bargaining, unlimited, 3, 4. 

Birth-rate, declining, 281, 285, 

Boehm-Bawerk E. von, on the 
law of price, 192, 193. 

Business Ability, relatively to 
prices and profits, 209, 210; 
to wages, 227, 233, 246, 247. 

Capital, supply of, 215, 216 217- 
221, 227, 233; rights of, 253. 

Capitalist, description of, 211, 
212; obligation of, 239; see 

Carnegie, Andrew, on duties of 
the rich, 273, 274; inheritance 
tax, 322, 323. 

Castelein, A, on a family Liv- 
ing Wage, 116. 

Charity, and a family Living 
Wage, III. 

Children, rights of, 108, 109; 
number of in family, 120-122. 
132; minimum age of as wage- 
earners, 133. 

Christian Authorities, on fair 
wages, 26-35; right to sub- 
sistence, 69. 

Clark, J. B., on capital and pro- 
ductivity of labor, 174; ethical 
value of productivity, 248; re- 
striction of working popula- 
tion, 286. 

Clark, Victor S., on wage- 
legislation in Victoria and 
New Zealand, 317, 318. 

Clothing, and the content of 
a Living Wage, 134. 

Community, industrial, obliga- 
tion of relatively to a Living 
Wage, 100-102, 190, 191, 238, 

Competition, effect of on wages. 
16, 17; among different por- 
tions of capital, 213, 214; 
among laborers, 223-225, 230, 

Conditions, social and industrial, 

and a Living Wage, 328, 329. 
Consumer, obligations of, 264- 

Consumption, in relation to pro- 
duction and prosperity, 168- 

Contemporary Opinion, on an 

ethical standard of wages, 

Contract, free, as a determinant 

of justice, 5, 10-15, 35-37. 242, 

243. 325- 
Corporations, and profits, 210; 

obligations of, 260, 261. 
Cost of Living, in certain in- 



dustries, 139-147; effect of a 
Living Wage on, 305-308. 

Cultivation, extension of and 
rent, 202, 203. 

Cunningham, W., on influence 
of medieval Christianity, 26; 
injustice of economic extor- 
tion, 36; responsibility for 
evils, 268. 

Custom, and wages, 4, 226. 

Demand, and price, 192-198; 
and interest, 215; and wages, 
226, 232. 

Devas, C. S., on content of a 
Living Wage, 129; right to 
interest, 258, 259. 

Distribution, ethical, various 
canons of, 74-80, 248, 249; 
economic, laws of, 191, 192. 

Duty, and rights, 50, 51; and 
right to a Living Wage, 118, 

Economic Life, complexity of 
and a Living Wage, 102-104. 

Economists, on competition and 
fair wages, 10-19; influence of 
on legislation, 20. 

Efforts, as a canon of distribu- 
tion, 77, 248, 249. 

Eight-Hour Law, effect of a 
universal, 319, 320. 

Employer, and obligation to pay 
a Living Wage, 115, 238-242, 
32s, 326; and free contract, 
242, 243; and productivity of 
labor, 243-248; and inability to 
pay a Living Wage, 249-260, 
262, 263 ; as affected by a 
universal Living Wage, 308- 
311; and by moral suasion, 

Equality, as a canon of distri- 
bution, 75-78; between labor 
and pay, 85, 86, 111-114; of 
gains, as a criterion of jujt 
price, 87, 90-94, 97. 

Equity, and a family Living 
Wage, 116. 

Ethical Teaching, and a Living 
Wage, 330. 

Family, a Living Wage for, 
110-122; size of normal, 119, 
120; cost of living of, 139- 
147; average income of, 180, 

Fertility, and rent, 199, 200. 

Fichte, J. G., on rights, 64. 

Food, and the content of a 
Living Wage, 134. 

Gilds, and the fixing of wages, 

Gompers, Samuel, on the con- 
tent of a Living Wage, 129, 

Hadley, A. T., on competition 
and wages, 17; overproduc- 
tion, 168; wages and produc- 
tivity, 183; effects of a rise in 
wages, 303; eight-hour law, 319. 

Hedonism, and natural rights, 

Hegelianism, and rights, 59, 60. 

Hobson, John A., on rights of 
productivity, 76; overproduc- 
tion, 169-172; wages and pro- 
ductivity, 183; imperialism, 
188, note; the unskilled la- 
borer, 276. 

Hospitals, and the underpaid, 

277, 278. 

Housing, and the underpaid, 

278, 279, 320, 321. 
Hunter, Robert, on poverty, 175, 

176, 277, 278. 

Imperialism, and overproduc- 
tion, 187. 

Income, national, and a uni- 
versal Living Wage, 178-181. 

Industrial Training, and the 
underpaid, 276, 277. 

Industry, organization of rela- 
tively to interest and wages, 

Ingram, J. K., on popularity 
of Malthusian teaching, 287. 

Interest, nature of, 211, 212; 


uniform rate of, 213, 214; 
determination of, 215, 216; 
and productivity of capital, 
216, 217; and wages, 217-221; 
ethical titles of, 253-260. 

Jevons, W. S., on liberty, 299, 

Justice, and a family Living 
Wage, III. 

Just Price, and theory of value, 
27, 28; and a Living Wage, 

Kant, Immanuel, on rights, 64. 

Ketteler, Archbishop, and the 
Living Wage doctrine, 34. 

Labor, and a Living Wage, 79, 
80; productivity of, 182-184, 
196, 197, 227-231; supply of, 
2i7-e2i, 227. 

Laborers, unmarried, and a 
family Living AVage, 120; 
number of underpaid, 153-162; 
prospects of underpaid, 162- 
177; non-competing groups of, 
223-226; the marginal and 
wages, 229, 230; claims of 
underpaid on other classes, 
262-279; limitation of off- 
spring by, 280-287; increased 
efficiency of, 287-289; saving 
by, 289; total abstinence and, 
290, 291; organization and, 
276, 291-296. 

Labor Unions, and a Living 
Wage, 37, 38; see Laborers. 

Land, rent of, 199-207; supply 
of and wages, 227, 233. 

Landowner, and rent, 206; and 
the laborer, 239, 262-264, 279. 

Law, civil, and fixing of wages, 
2, 19-21, 23-25, 38, 39; en- 
forcement of a Living Wage 
by, 313-319- 

Law, economic, nature of and 
relation to rates of wages, 

Leo XIII, Pope, on a Living 
Wage, 32, 33, no. III. 


Liberty, individual, influence of 
ideal of, 12, 13, 19-21; equal, 
as the measure of rights, 64; 
relation of to State regulation 
of industry, 297-300. 

Lilly, W. S., on consumer and 
underpaid worker, 264-266. 

Livelihood, a Decent, the right 
to, 72-80, 324, 32s; the basis 
of right to a Living Wage, 
99. 100, 117, 118; difficulty of 
measuring, 123-125; absolute 
and relative, 125-127; in terms 
of goods, 127-136; in terms of 
money, 136-150; in the case 
of the employer, 251-253. 

Loan-Capitalist, obligations of, 
262-264, 279; effect of a uni- 
versal Living Wage on, 309. 

Location, effect of on rent, 200, 
201, 205. 

Luxury, and a Living Wage, 
184-186; and obligations of 
the employer, 252, 253; and 
obligations of the rich, 272, 

Machinery, displacing men, 166- 
168; causing overproduction, 
168-174; latent possibilities of, 
187-189; and the rate of in- 
terest, 216, 217. 

Marriage, and a reasonable life, 
117, 118. 

Marshall, Alfred, on economic 
law, 7, 8; the content of a 
Living Wage, 128; consump- 
tion and productivity, 184; 
luxury, 184. 

Marx, Karl, on value, 196, 197. 

Middle Ages, and just price, 
98, 99; and social aspect of 
property, 105-107. 

Middle Classes, and laissez-faire, 

Mitchell, John, on content of a 
Living Wage, 130, 131, 138, 
139; organization, 294, 295. 

Monopoly, and the future of 


the laborer, l6g, l66; and free ' 
contract, 242. 

Moral Convictions, and the rate 
of wages, 4, 5. 

Natural rights, 44-66; descrip- 
tion of, 44-47; defence of, 
48-53; opposing theories, 55- 
62; Catholic and Revolution- 
ary views of, 62-66; duty of 
State to protect, 301. 

Need, ordinary, grave, and ex- 
treme, 274, 275. 

Needs, a canon of distribution, 
^^, 78, 249; a measure of 
just wages, 112-114; absolute 
and conventional, ■12S-127; re- 
gular and occasional, 132-135; 
spiritual, 135, 136; of the 
employer, 250-253. 

New Zealand, wage-legislation 
of, 38, 39, 315-318. 

Old-Age Pensions, and State Ac- 
tivity, 321, 322. 

Organization, see Laborers. 

Overproduction, and the under- 
paid, 168-174. 

Ownership, see Distribution, Pro- 
perty, Right. 

Parents, and the wage-rights of 
a son, 118, iig. 

Personality, and natural rights, 
51, 52; and right to subsist- 
ence, 70-72; to a decent live- 
lihood, 72, 74, 324; to a Liv- 
ing Wage, 99, 100, 117, 118, 

Political Economy, and ethical 
conceptions, 5, 6. 

Price, determination of, 190-198; 
and distribution, 190-198; and 
rent, 203, 204; and profits, 
208-210; effect of a universal 
Living Wage on, 303-313. 

Product, division of the national, 
191, 192; of the marginal 
laborer, 229-232. 

Production, methods of and 

rates of interest and wages, 

Productivity, a canon of distri- 
bution, 75-77; and high wages, 
182-184; latent, and a univer- 
sal Living Wage, 187-189; and 
interest, 215, 217; and wages, 
227-231, 243-248; 287-289; not 
always ascertainable, 244-247; 
as a title to wages and in- 
terest, 248, 249; 253-258. 

Property, rights of, 71, 72, 241, 
242; social aspect of, 104-107. 

Profits, determination of, 207- 

Rae, John, on eight-hour law, 

Reason, and the titles of owner- 
ship, 241, 242. 

Religion, and labor question, 
329. 330. 

Rent, determination of, 199-206. 

Reports of Labor Bureaux, Unit- 
ed States Census, and Con- 
gressional Commissions, on 
size of laborers' families, 121, 
132; cost of living, 139-147; 
unemployment, 148, 149; num- 
ber of underpaid, 154-162; 
movement of wages, 162-165; 
organization of labor, 293. 

Resources, national, and a uni- 
versal Living Wage, 182-189; 
and interest, 215. 

Revolutionary Philosophers, on 
natural rights, 62, 63, 

Rich, obligations of the, 270-279. 

Right, the, to subsistence, 68-72; 
property, 71, 72; a decent live- 
lihood, 72-80; equality in dis- 
tribution, 75-78; a Living 
Wage, 81-122. 

Rights, of the employer, 251-260; 
see Natural Rights. 

Right Conduct, criterion of, 48, 

Ritchie, D. G., on rights, 60; 



law of nature, 63. 

Rogers, J. E. Thorold, on 
"Statutes of Laborers," 24- 

Roosevelt, President, on race 
suicide, 284, 285 ; corporations 
and national control, 314. 

Saving, effect of excessive, 168- 
174; and interest, 215, 258- 
260; and wages, 227, 289. 

Sexual Self-Restraint, and the 
underpaid, 280-287; economic- 
ally efficacious, 281, 282; 
morally pernicious, 282-287. 

Shelter, and the content of a 
Living Wage, 134, 135. 

Sidgwick, Henry, on ethical 
teaching of the economists, 
5, 11; basis of rights, 52, 53. 

Small, A. W., on content of a 
Living Wage, 136. 

Smart, W., on freedom of con- 
tract, 18; the content of a 
Living Wage, 127, 128; ma- 
chinery, 166, 167; luxury, 
185; abolition of poverty, 188; 
effects of a rise in wages, 
303. 304; ten-hour day, 320. 

Smith, Adam, on industrial 
liberty, 12-14. 

Social Estimate, the, as a cri- 
terion of just price, 88, 89, 
98, 99; and of a Living Wage, 
94-96, 116. 

Social Utility, and natural 
rights, 55-62; and the right 
to a Living Wage, 82-85, "SJ 
and employer's obligation, 
IIS, 240, 241. 

State, the, and rights, 55-62; 
and the wage-paying function, 
191, 240; and regulation of 
industry, 297-300 ; functions 
of, 301, 302; power of to bring 
about a universal Living 
Wage, 313-323- 

Statutes of Laborers, 23-25. 

Subsistence, the right to, 68- 


Superfluous Goods, description 
of, 271-273; duties of pos- 
sessor of, 273-279; methods 
of distributing, 275-279. 

Supply, and price, 192-198; and 
interest, 215; and wages, 226, 

Taxation, of incomes and ia- 
heritances, 322, 323. 

Theological Writers, and Living- 
Wage doctrine, 97, 98. 

Total Abstinence, and wages of 
the underpaid, 290, 291. 

Underpaid, see Laborers. 

Undertaker, his share of the 
product, 208-211; importance 
of, 246-248; see Employer. 

Unemployment, amount of, 148, 
149; and machinery, 166-168. 

Value, of product relatively to 
wages, 231, 232, 243i 244; 
see Price. 

Vermcersch, A., on a family 
Living Wage, 116; content of 
a Living Wage, 131. 

Victoria, legislation of on wages, 
38, 31S-318. 

Wage, a Living, economic feasi- 
bility of, 302-313; enforce- 
ment of by State, 313-319; 
effect of on social and in- 
dustrial conditions, 328, 329; 
wisdom of striving for, 329- 

Wage-Fund, 6. 

Wage-System, unknown in 
Middle Ages, 29; not essen- 
tial to human welfare, 68. 

Wages, difference between just 
and living, 78; economy of 
high, 182-184; and interest, 
217-221; nature of, 222, 223; 
no tendency of to a uniform 
level, 223-225; determination 



of, 226, 227, 232, 233; and 
productivity, 227-231; com- 
pletely just, 326, 327. 

Walker, F. A., on resistance by 
laborers, 279; benefits of 
limitation of offspring, 282. 

Webb, Sidney and Beatrice, on 
"Statute of Elizabeth," 23; 
medieval idea of regulation, 
26; a Living Wage, 82, 129; 
declining birth-rate, 285; or- 

ganization of labor, 291, 
292, 294; economic feasibility 
of a universal Living Wage, 

305-307. 313- 
Wife, the, should not be a 

wage-earner, 134. 
Women, rights of to a Living 

Wage, 107, 108. 
Zigliara, Cardinal, on a family 

Living Wage, iix-114. 


'T^HE following pages contain advertisements of a few of the 
Macmillan books on kindred subjects. 


Economics, Politics, and Sociology 

Under the General Editorship of 


Director of the School of Economics and Political Science; Professor of Political 
Economy at the University of Wisconsin 

x2mo Half Leather $1.25 net, each 

Monopolies and Trusts. By Richard T. Ely, Ph.D., LL.D. 

" It is admirable. It is the soundest contribution on the subject that has appeared." 

— Professor John R. Commons. 

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ten, University of Pennsylvania. 
Outlines of Economics. By Richard T. Ely, Ph.D., LL.D., author of " Monopolies 

and Trusts," etc. 
The Economics of Distribution. By John A. Hobson, author of " The Evolution 

of Modern Capitalism," etc. 
World Politics. By Paul S. Reinsch, Ph.D., LL.B., Professor of Political Science, 

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Economic Crises. By Edward D. Jones, Ph.D., Junior Professor of Commerce and 

Industry, University of Michigan. 
Government in Switzerland. By John Martin Vincent, Ph.D., Associate Professor 

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Political Parties in the United States, 1846-1861 . By Jesse Macy, LL.D., Professor 

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Essays on the Monetary History of the United States. By Charles J. Bullock, 

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Social Control: A Survey of the Foundations of Order. By Edward Alsworth 

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Colonial Government. By Paul S. Reinsch, Ph.D., LL.B., author of " World Politics," 

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Municipal Engineering and Sanitation. By M. N. Baker, Ph.B., Associate Editor 

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American Municipal Progress. By Charles Zueblin, B.D., Associate Professor of 

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Irrigation Institutions. By Elwood Mead, C.E., M.S., Chief of Irrigation Investiga- 
tions, Department of Agriculture. 
Railway Legislation in the United States. By Balthasar H. Meyer, Ph.D., 

Professor of Political Economy, University of Wisconsin. 
Studies in the Evolution of industrial Society. By Richard T. Ely, Ph.D., 

LL.D., author of '' Monopolies and Trusts,'" etc. 
The American City: A Problem in Democracy. By Delos F. Wilcox, Ph.D., author 

of " A Study of City Government." 
Money: A Study of the Theory of the Medium of Exchange. By David Kinley, 

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The Foundations of Sociology. By Edward Alsworth Ross, Ph.D., author of" Social 

Control," etc. 
The Elements of Sociology. By Frank W. Blackmar, Ph.D., Professor of Sociology 

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Colonial Administration. By Paul S. Reinsch, Ph.D., LL.B., author of "Colonial 

Government," " World Politics," etc. 
An Introduction to the Study of Agricultural Economics. By Henry C. Taylor, 

M.S.Agr., Ph.D., Assistant Professor of Political Economy in the University "M 





The Problem of Wealth and Poverty, of Profits, Wages, 
and Trades Unionism 


Author of " Plain Facts as to the Trusts and the Tariff" 

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"It will be gratifying to sober-minded readers to know that certain 
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With Chapters on the Railroad Problem and Municipal 


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Ins'iiitnte of Industrial T^elatione 

University of California 

Los Angeles 24, California 

UCLA-Young Research Library 

HB301 .R95I 1912 


L 009 591 575 7 


:ill !